Economics
Economics
10th Edition
ISBN: 9781259193156
Author: Colander, David C.
Publisher: Mcgraw-hill/irwin,
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Chapter 2, Problem 1QE
To determine

The shift of the production possibility curve.

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Explanation of Solution

The figure shows the production possibility curve.

Economics, Chapter 2, Problem 1QE

In the figure, the horizontal axis represents the production of widgets and the vertical axis represents production of wadgets. As a result of an increase in the production of widgets, the point that touches the X-axis will move rightward. If the production of wadgets decreases, the point that touches the Y-axis moves downward. This will create a new production possibility curve.

Economics Concept Introduction

Production possibility curve: Production possibility curve refers to the different combinations of two commodities that can be produced using the available resources and technologies fully and efficiently.

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