**Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit of oil?****Explanation of Graphs:**1. **Graph A:** This graph shows two production possibility frontiers (PPFs), with the lower PPF shifting inwards, indicated by an arrow pointing to the left.2. **Graph B:** This graph also shows two PPFs; however, the lower PPF is shifting outwards, indicated by an arrow pointing to the right.3. **Graph C:** This graph presents two PPFs with the inner PPF moving outward and upward, indicated by a diagonal arrow pointing up and to the left.4. **Graph D:** This graph illustrates two PPFs where the inner PPF is shifting inward, indicated by an arrow pointing downward.**Answer:**When an economy finds a new deposit of oil, its production capacity generally increases, allowing for more production of goods and services. This is typically represented by an outward shift of the production possibility frontier (PPF). Therefore, **Graph B** best represents this scenario, as it shows an outward shift of the PPF, indicating an increase in production capacity due to the discovery of new resources such as oil. **Exploring the Impact of New Oil Deposits on the Production Possibilities Frontier**In economic theory, the Production Possibility Frontier (PPF) illustrates the maximum feasible amounts of two commodities that a business can produce when those resources are allocated efficiently. Let's take a look at how finding a new deposit of oil impacts the PPF of an economy. Below are four graphs labeled Graph C and Graph D, which represent changes in the PPF. The specific question is:**Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit of oil?****Graphs:**- **Graph C:** - This graph shows an outward shift of the PPF. - The original PPF is depicted by a straight line sloping downward from left to right. - A new PPF, also a straight line, shifts outward, indicating an increase in production capability. - **Graph D:** - This graph shows an inward shift of the PPF. - The original PPF is depicted by a straight line sloping downward. - A new PPF shifts inward, representing a decrease in production capability.**Answer Options:**A. Graph A.B. Graph B.C. Graph C.D. Graph D.Finding a new deposit of oil increases the availability of resources, enabling the economy to produce more goods. This would be depicted by an outward shift in the PPF, where the new curve is outside the original curve, indicating greater production potential.Thus, the correct answer is **C. Graph C**.This change reflects an outward shift in the Production Possibilities Frontier, allowing for increased production capabilities due to the additional resources provided by the new oil deposit.

Production possibility frontier (PPF) is helpful in making economic analysis on the market condition…

Answered: Which of the above 4 graphs best…

Business

Economics

Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit of oil?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Briefly discuss the impact of COVID on the UK economy.

A: Covid 19 has caused worldwide pandemic that has affected the economy of all the countries.

Q: Suppose Martha and Julia both work at a bakery making bread and muffins. In an hour, Martha can…

A: The word "opportunity cost" is used in economics, and it comes from the logical assumption that…

Q: (iv) set Y(0) 1766.667, the equilibrium value. Let investment rise by 100. Derive and plot the open…

Q: Also, supposing there is a discovery of steel in Nepal, explain the impact of steel on the economy…

A: Production possibility frontier is the curve which shows all possible combinations of two goods…

Q: CAPITAL GOODS A PPC 2 PPC CONSUMER GOODS Suppose that this year, the economy is operating at point…

A: The Production Possibility Curve highlights the different combinations of the goods that an economy…

Q: The following graph shows the same PPF for Congaree as before, as well as its initial consumption at…

A: Production possibility frontier shows different combination of two good or services that can be…

Q: On a PPF graph, unemployment of workers is repres A point inside (to the left of) the PPF An inward…

A: The answer is given below

Q: 1.1 Draw the following diagram and explain what an inward shift in the PPF depicts Consumer goods…

A: The production possibility frontier (PPF), also known as the production possibility curve, is a…

Q: The following graph shows the same PPF for Candonia as before, as well as its initial consumption at…

A: Comparative advantage is when a country is able to produce at a lower opportunity cost.

Q: Graph A Graph B Graph C Graph D Which of the above 4 graphs best represents the change in the PPF if…

A: PPF stands for production possibilities frontier. It demonstrates the several mix of two final…

Q: What are the effects of global economy? Factors affecting global economy

A: The "global economy" is described as a term in which worldwide economic activities are…

Q: You have just used three of the four variables in the IPAT equation. Now give one example of how the…

A: The T variable in the I=PAT equation represents how resource intensive affluent production is; how…

Q: One last time, consider the case of Vil and Malleus from th previous questions. When Malleus starts…

A: PPF: Graphical representation of the combination of two goods that can be produced in the economy in…

Q: Why is this economic measuresignificant?

A: Economic growth expands the capacity of the state as well as the supply of public goods. Growth…

Q: 100 DRYERS 88 2288 22 22 90 80 70 60 50 40 30 20 10 C I D 10 20 30 40 50 60 70 80 90 100 WASHERS B…

A: Production possibility frontier or PPF shows the different combinations of two goods that can be…

Q: Question 3. Consider the following linear PPF. Beef 200 50 Wine Christopher Boone 2024 - This…

A: Production possibility curve is the different combination of production units used to produce to two…

Q: The following graph shows the same PPF for Congaree as before, as well as its initial consumption at…

A: Production possibility frontier shows different combinations of two goods or services that can be…

Q: Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit…

A: Production possibility frontier (PPF) helps make economic studies on the market condition of an…

Q: 1) How much cheese 2) How much cheese is produced in Italy? is consumed in Italy?

A: The illustration depicts a dilemma connected to the production and consumption of cheese and lamb in…

Q: It was reported in the New York Times that the China's State Council has encouraged more spending to…

A: The curve that depicts various combinations of goods and services that could be produced in an…

Q: Y B' CONSUMER GOODS A D' C saos

A: Production possibilities curve shows the different combinations of goods that a country can produce…

Q: What are the properties of the production possibility curve

A: The production possibility curve, also called PPC is a curve that depicts the allocation of two…

Q: B Y

A: Production possibilities curve shows the different combinations of goods and services that a nation…

Q: A company makes two types of calculators, one that uses batteries and one that is solar powered. The…

A: Given:The company makes two products - battery operated calculators and solar-powered calculators…

Q: Suppose further that consumers in both countries have identical Leontief preferences, utility…

A: Units of Labour Required Home Foreign Fish 6 2 Edamame 6 3

Q: Assume that an economy is operating inside its PPF Explain how you would use the PPF to measure the…

A: The Production Possibilities Frontier and Social Choices : Just as a person cannot have everything…

Q: Please dont use chatgpt, thank you..

A: Step 1: The Production Possibilities Frontier (PPF) is a graphical representation that shows the…

Q: Homework (Ch 03) Attempts: Keep the Highest: 3/4 2. Gains from trade Consider two neighboring island…

A: Opportunity Cost refers to the next best alternative of production foregone for producing a…

Q: World consumption of silver, Q, in millions of ounces, to make jewelry and the price of silver, P,…

A: Demand is the desire backed by a willingness to pay and the ability to pay by an individual. The…

Q: What is the contribution of banana leaves plate or biodegradable plates to the economy?Explain.

A: Banana Leaf Technology, for example, is working to address this stark reality by suggesting banana…

Q: Bread On the PPF above, which of the points is inefficient? A C D G Wine

A: Production Possibility Frontier:- The production possibility frontier refers to a graph in market…

Q: 4. Two countries with which the US conducts a large amount of trade are China and Mexico. The table…

A: To estimate trade using the gravity model, use the equation:Where:Tij is the predicted trade…

Q: Consider the following economy C=1000+0.4(Y-T) 1=500 T=400 G=300 What is the consumption of…

A: Answer: Given, C=1000+0.4Y-TI=500T=400G=300 Let us first find the equilibrium level of income (Y)…

Q: CAPITAL GOODS PPC, CONSUMER GOODS Suppose that this year, the economy is operating at point A, but…

A: The Production Possibility Curve highlights the different combinations of the goods that an economy…

Q: As you did for Maldonia, use the green line (triangle symbol) to plot the trading possibilities line…

A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…

Q: ing inefficiently? the available resources and technology? resources and technol OE and F C and D A…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subpart for you.…

Q: Explain how the relative PPP differs from the absolute PPP. Can the Relative PPP hold true while, at…

A: Absolute PPP is termed the price of two goods that will be constant in two nations. Suppose, a…

Q: Note: Dashed drop lines will automatically extend to both axes. Candonia 16 14 Consumption After…

A: Comparative advantage is an economy's ability to produce a particular good or service at a lower…

Q: If an economy begins to use its resources more effeciently, it will move further away from it PPf

A: Answer in step 2

Concept explainers

Welfare Analysis

Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.

Question

**Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit of oil?**

**Explanation of Graphs:**
1. **Graph A:** This graph shows two production possibility frontiers (PPFs), with the lower PPF shifting inwards, indicated by an arrow pointing to the left.

2. **Graph B:** This graph also shows two PPFs; however, the lower PPF is shifting outwards, indicated by an arrow pointing to the right.

3. **Graph C:** This graph presents two PPFs with the inner PPF moving outward and upward, indicated by a diagonal arrow pointing up and to the left.

4. **Graph D:** This graph illustrates two PPFs where the inner PPF is shifting inward, indicated by an arrow pointing downward.

**Answer:**
When an economy finds a new deposit of oil, its production capacity generally increases, allowing for more production of goods and services. This is typically represented by an outward shift of the production possibility frontier (PPF).

Therefore, **Graph B** best represents this scenario, as it shows an outward shift of the PPF, indicating an increase in production capacity due to the discovery of new resources such as oil.

**Exploring the Impact of New Oil Deposits on the Production Possibilities Frontier**

In economic theory, the Production Possibility Frontier (PPF) illustrates the maximum feasible amounts of two commodities that a business can produce when those resources are allocated efficiently. Let's take a look at how finding a new deposit of oil impacts the PPF of an economy.

Below are four graphs labeled Graph C and Graph D, which represent changes in the PPF. The specific question is:

**Which of the above 4 graphs best represents the change in the PPF if the economy finds a new deposit of oil?**

**Graphs:**
- **Graph C:**
- This graph shows an outward shift of the PPF.
- The original PPF is depicted by a straight line sloping downward from left to right.
- A new PPF, also a straight line, shifts outward, indicating an increase in production capability.

- **Graph D:**
- This graph shows an inward shift of the PPF.
- The original PPF is depicted by a straight line sloping downward.
- A new PPF shifts inward, representing a decrease in production capability.

**Answer Options:**
A. Graph A.
B. Graph B.
C. Graph C.
D. Graph D.

Finding a new deposit of oil increases the availability of resources, enabling the economy to produce more goods. This would be depicted by an outward shift in the PPF, where the new curve is outside the original curve, indicating greater production potential.

Thus, the correct answer is **C. Graph C**.

This change reflects an outward shift in the Production Possibilities Frontier, allowing for increased production capabilities due to the additional resources provided by the new oil deposit.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose a new hormone is discovered that increases the productivity of the workers in producing beef, but does not affect the production of cabbage.How will that development change the production possibility fortier.
Suppose an economyuses two resorces (labor and capital) to produce two goods (wheat and cloth). Captial is relativley more useful in prducing cloth, and labor ir relativley more useful in prducing wheat. If the supply of cpatial falls by 10% and the suppy of labor increases by 10%, how will the PPF for wheat and cloth change?
Need part e and f .thank you
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.
Farm-A and Farm-B grow the following amounts of potatoes and cabbage in their famrs: Farm-A takes one week to produce 107 units of potatoes and 208 units of cabbages Farm-B takes one week to produce 125 units of potatoes and 160 units of cabbages a) What is the opportunity cost of Farm-A to produce 20 units if cabbages b) What is the opportunity cost of Farm-B to produce 12 units of potatoes
How can you interpret the PPF slope?
The following diagram is for Country A based on the Ricardo model. Wheat (millions) 30 Terms of Trade E 15 PPF Corn 25 30 50 (millions) Refer to the figure above. Imports of this country equal_ O 25 million corns O 50 million corns O 15 million wheat O 30 million wheat
Give only typing answer with explanation and conclusion PPC is concave to the point of origin because as we move along the curve, slope of PPC keep on decreasing. True or false?
Which of the following is a use of the production possibility curve (PPC) in macroeconomics? a. The company decides the price of the product using PPC b. The economy finds solution to basic economic problems c. Private income of a company is calculated on the basis of PPC d. The company decides to produce product A or B
Solve the attachment.
Graph A Graph B Graph C Graph D Which of the above 4 graphs best represents the change in the PPF if a tornado destroys part of the country?
Please assist; An economy produces capital and consumer goods. Discuss the impact on the PPF due to the following: (a) The discovery of a new source of oil (b) The unemployment rate in the economy has decreased by 5% (c) Improved technology that impacts only the production of capital goods.