MICROECONOMICS-MINDTAP (1 TERM)
MICROECONOMICS-MINDTAP (1 TERM)
13th Edition
ISBN: 9780357686942
Author: Arnold
Publisher: CENGAGE L
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Question
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Chapter 2, Problem 1QP

(a)

To determine

Changes in U.S PPF.

(a)

Expert Solution
Check Mark

Explanation of Solution

A war taken place in the US soil leads to reduction in capital stock, potential resources and also kills people. This in turn shifts the US’s PPF inward.

Economics Concept Introduction

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(b)

To determine

Changes in U.S PPF.

(b)

Expert Solution
Check Mark

Explanation of Solution

The discovery of new oil field increases the US’s resources. Thus, it shifts the PPF of U.S outward.

Economics Concept Introduction

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(c)

To determine

Changes in U.S PPF.

(c)

Expert Solution
Check Mark

Explanation of Solution

Decreasing unemployment rate represented by the movement of a point that is below the PPF to another point that is near or on the frontier.

Economics Concept Introduction

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(d)

To determine

Changes in U.S PPF.

(d)

Expert Solution
Check Mark

Explanation of Solution

The new law decreases the productive efficiency of the labor that leads to the movement of a point which is on the frontier to the point that is inside the frontier.

Economics Concept Introduction

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

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