**Step 2: Drawing a Modified Production Possibility Frontier (PPF)**1. **Initial Setup:** - Create a new graph featuring the Production Possibility Frontier (PPF) of the economy. Ensure that the axes are properly labeled. Typically, the x-axis and y-axis will denote the quantities of two different goods produced by the economy.2. **Highlighting Technological Change:** - Use a different colored pen, pencil, or highlighter to illustrate how the PPF shifts when there is a technological advancement that specifically enhances the production of batteries. 3. **Understanding the Shift:** - A technological improvement in battery production implies that the economy can produce more batteries without reducing the production of blueberries. Hence, the part of the PPF related to batteries will shift outward. - Remember, the intercept for blueberries will remain unchanged, indicating that their production capacity is unaffected by this technological change.4. **Labeling:** - Clearly label the new PPF to distinguish it from the original one. This helps in visualizing how technology affects production possibilities.This step-by-step guide facilitates understanding how specific technological advancements can impact the economy's production capabilities, depicted through shifts in the PPF.

The production possibility frontier represents the total production of the goods and services in an economy at given resources. When any changes in the resources and technology occur then PPF shifts accordingly. AB represents the PPF where the E point shows the efficient point, the C point shows the inefficient point, D point represents the unattainable point. When technology changes and increases the production of batteries only there is no change in the blueberries. AB1 represents the new PPF which shows that due to technological advancement production of the batteries has increased.

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Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.

Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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BD and India are both producers of garments and rice. Garments require labor and capital, while rice requires labor and land. Assume that labor is mobile between sectors, but not between countries. Given the relative opportunity costs of garments and rice in each country, India exports rice to BD and Imports garments from BD. Suppose the amount of land available for rice cultivation in India grows. How will it affect India's PPF? What will be the impact of this development on Indian labor, Indian landowners and Indian garment factory owners? Use diagrams to explain if necessary.
4. a. Suppose that you are on a deserted island and can produce either 32 tons of coconuts OR 16 tons of pineapples. Draw the PPF representing this situation. Assume that coconuts are on the x-axis. Also assume that the PPF is linear. Clearly label your graph. b. For each of the following combinations say whether they are attainable (feasible) or unattainable (infeasible), based on the above information. If they are feasible, say whether they are efficient or inefficient. Also, label the three points on the graph above. (i) 8 tons of coconuts and 12 tons of pineapples: (ii) 16 tons of coconuts and 3 tons of pineapples:
Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below. a) A relaxation of policies allowing more foreign direct investment into the country. b) Increasing the minimum wage level. c) A decrease in expenditure on research and development. d) An increase in the retirement age. e) Government policies supporting the provision of services, without affecting manufacturing.
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Problem 2 Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make two hamburgers in an hour or one pancake in an hour. Jake can make three pancakes in an hour or two hamburgers in an hour. Use this information to answer the following questions: a.) Draw Jake and Bob's PPFS, with hamburgers on the x-axis. b.) Give equations for Jake and Bob's PPFS in y = mx+b form, still treating hamburgers as the x variable. c.) Who has absolute advantage in the production of hamburgers? Who has absolute advantage in the production of pancakes? d.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes? e.) Can Bob and Jake both benefit from trade if the terms of trade are one pancake per hambruger? Why or why not?
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Hi! I am currently stuck on this question: Suppose there is an improvement in medical technology that enables more healthcare to be provided with the same amount of resources. How would this affect the production possibilities curve and, in particular, how would it affect the opportunity cost of education? I am confused as to why education increases. I know that the medical technology would increase the PPF because of the improvement, but wouldnt that decrease the opportunity cost of education because there is more technology? Thanks!
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