an outward shift of a nation's production possibilities curvean outward shift of a nation's production possibilities curve

If more workers join the labor force of a country, the unemployment rate tends to _______. Economists call this economic growtha sustained rise over time in a nation's production of goods and services. Ski sales grew, and she also saw demand for snowboards risingparticularly after snowboard competition events were included in the 2002 Winter Olympics in Salt Lake City. b) Immigration. A. growth is the basic means of improving living standards. rightward shift of the nation's long-run aggregate supply curve. The answer is Yes, and the key lies in comparative advantage. Thus, the economy chose to increase spending on security in the effort to defeat terrorism. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. In Panel (a), a point such as N is not attainable; it lies outside the . Where will it produce the calculators? a. Suppose a prolonged recession increases the number of unemployed workers in the nation. d. A law that reduces the, Which of the following are likely to lead to economic growth? C) Without unemployment insurance, the aver, Suppose an economy experiences an increase in productivity. Because a shrinking population has reduced the number of productive workers in the economy. C. Increase in the capital stock. Notice also that this curve has no numbers. c. Lax labor laws. This curve depicts an entire economy that produces only skis and snowboards. C. The rate of tec, What do we call the situation where capital grows faster than the labor force? workforce has: The labour supply might also grow because of the impact of net inward migration of people of working age. A.total output/worker-hours. Which of the following does NOT lead to long-run economic growth? The economy had moved well within its production possibilities curve. Assume the economy moves from a situation with full employment to one in which the unemployment rate is higher. Some examples of economic policies that contribute to economic growth are: The production possibilities curve illustrates the maximum combination of output of two goods that an economy can produce, such as capital goods and consumption goods. c. Less output from more workers. The fact that the opportunity cost of additional snowboards increases as the firm produces more of them is a reflection of an important economic law. B. Lorem ipsum dolor sit amet, consectetur adipiscing elit. However, more recent concerns of technological progress surround automation of manufacturing jobs with possible displace. It is a visualization of production possibilities for two goods. Figure 2.4 Production Possibilities at Three Plants shows production possibilities curves for each of the firms three plants. How does technological progress shift the labor demand curve? More generally, the absolute value of the slope of any production possibilities curve at any point gives the opportunity cost of an additional unit of the good on the horizontal axis, measured in terms of the number of units of the good on the vertical axis that must be forgone. B. less than the full-employment rate of . At point A, the economy was producing SA units of security on the vertical axisdefense services and various forms of police protectionand OA units of other goods and services on the horizontal axis. A rightward (an outward) shift of a nation's production possibilities curve could be caused by: A) a decrease in technology. More output from more workers. Think about what life would be like without specialization. hich of the following will cause the production possibilities curve to shift inward? B.occurs, not because of growth, but because common resources are treated as free goods. unemployed) is called the: D. the annual increase in nominal GDP per worker. Because the production possibilities curve for Plant 1 is linear, we can compute the slope between any two points on the curve and get the same result. D) do all of the above. D. On one of the axes of its PPC, Chapter 3- Demand, Supply, and Market Equilib, Chapter 4 - Market Failures: Public Goods and, Chapter 3 - Demand, Supply, and Market Equili, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Alexander Holmes, Barbara Illowsky, Susan Dean, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Pathophysiology NYU Final (PrepU Questions We. c. Actual real GDP is, Which of the following is not one of the causes of stagnating real wages stagnating in the 1970s, according to Richard Wolff? The bowed-out curve of Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports becomes smoother as we include more production facilities. At the same time, manufacturing output experienced slightly more rapid growth than the overall economy. Which of the following is most likely to increase the natural rate of unemployment? How would a recession impact. (a) an increase in technology (b) an increase in the number of workers available (c) an improvement in the literacy rate (d) a reduction in the unemployment rate, Which of the following will cause the production possibilities curve to shift inward? China and India are two countries whose investment-to-GDP ratio has both risen over the last twenty years. b. An increase in the age of the working population. How many calculators will it be able to produce? As we include more and more production units, the curve will become smoother and smoother. Plant R has a comparative advantage in producing calculators. It illustrates the production possibilities model. An economys factors of production are scarce; they cannot produce an unlimited quantity of goods and services. Increase in average wages. Further, the economy must make full use of its factors of production if it is to produce the goods and services it is capable of producing. The absolute value of the slope of a production possibilities curve measures the opportunity cost of an additional unit of the good on the horizontal axis measured in terms of the quantity of the good on the vertical axis that must be forgone. Nam risus, View answer & additonal benefits from the subscription, Explore recently answered questions from the same subject, Explore documents and answered questions from similar courses. Given the labor and the capital available at both plants, it can produce the combinations of the two goods at the two plants shown. An increase in the labor force b. We can think of this as the opportunity cost of producing an additional snowboard at Plant 1. The increase in spending on security, to SA units of security per period, has an opportunity cost of reduced production of all other goods and services. Similarly, an economy that is recovering from a recession might experience an increase in real GDP, but that is not economic growth. b. nation A/smaller c. nations A and B/ the same. b. Direct link to johnpaul122jpr's post I have a question about t, Posted 4 years ago. Do things automatically return, Which of the following is likely to cause an outward shift of the production possibilities curve? A production possibilities curve is a graphical representation of the alternative combinations of goods and services an economy can produce. It illustrates the production possibilities model. the know how to combine labor, capital, and natural resources to produce is an important aspect of production. Why, or why not? d. A decline in workers' nonlabor incomes. Which one of the following people is frictionally unemployed? A. If the firm were to produce 100 snowboards at Plant 3, ski production would fall by 50 pairs per month (recall that the opportunity cost per snowboard at Plant 3 is half a pair of skis). Hong Kong, with its huge population and tiny endowment of land, allocates virtually none of its land to agricultural use; that option would be too costly. Which of the following is the most important source of US economic growth in the long run? We would say that Plant 1 has a comparative advantage in ski production. Plant S has a comparative advantage in producing radios, so, if the firm goes from producing 150 calculators and no radios to producing 100 radios, it will produce them at Plant S. In the production possibilities curve for both plants, the firm would be at M, producing 100 calculators at Plant R. Principles of Economics by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted. Technological advance: a. is the ability to produce more output per resource b. destroys jobs c. both of the above d. neither of the above. Declining adult literacy rates C. Widespread relocation of manufacturing firms to low-wage nations D. National program of ch, Which of the following reasons could explain why an economy would be operating inside its production possibilities curve (PPC)? It is, Assume that political instability around the world causes American business firms to decrease business investment signaling the start of a recession in the economy. a. a. A) What is full employment? C. More stay-at-home moms join th. b. downward shift of the nation's aggregate expenditure curve. Each of the plants, if devoted entirely to snowboards, could produce 100 snowboards. C) lead to more rapid economic growth. A. Leftward shift of the production possibilities curve Plant 3 has a comparative advantage in snowboard production because it is the plant for which the opportunity cost of additional snowboards is lowest. When automation removes most of the jobs which ideology will work best: Capitalism, Socialism, or Egalitarianism? Workers, for example, specialize in particular fields in which they have a comparative advantage. False. a. Countries with high rates of economic growth tend to have: A) a lower life expectancy at birth. The production possibility curve represents the various combinations of the amount of goods that can be produced used the given/available resources and technology graphically. If nation A commits a larger share of its resources to capital and technological improvements than nation B, then over time _____ will realize _____ outward shifts in its production possibilities curve. Yes/No explain your answer. In this section, we shall assume that the economy operates on its production possibilities curve so that an increase in the production of one good in the model implies a reduction in the production of the other. A decline in the birth rate B. The economy is in the peak phase of the business cycle. (Consider This) Over the past several decades, the percentage of women in the paid U.S. Specialization means that an economy is producing the goods and services in which it has a comparative advantage. What is technological unemployment? d. Destruction of resources. Which of the following would cause a rightward shift in the labor demand curve? Panel (a) of Figure 2.6 Production Possibilities for the Economy shows the combined curve for the expanded firm, constructed as we did in Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. Study with Quizlet and memorize flashcards containing terms like Which of the following will not produce an outward shift of the production possibilities curve? At point A, Alpine Sports produces 350 pairs of skis per month and no snowboards. The result is the bowed-in curve ABCD. In developed economies, less-educated workers: A) have more jobs to choose from. Which of the following is not predicted by the technology shock driven real business cycle (RBC) theory? The increased use of temporary and part-time workers. If you're seeing this message, it means we're having trouble loading external resources on our website. Explain how, if at all, each of the following affects the location of a country's production possibilities curve: a. could increase the nation's real GDP, but not the real-. Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. In Panel (a) we have a combined production possibilities curve for Alpine Sports, assuming that it now has 10 plants producing skis and snowboards. Economic growth is a shift out of either of these curves. B) an increase in resources. 79. A) eventually lead to a shift to the right of the production possibilities curve. A production possibilities curve shows the combinations of two goods an economy is capable of producing. Existing workers in a country get trained to operate widely used accounting software. Improved methods of production c. An increase in the education and training of the labor force d. A decrease in unemploymen, "Technological change eliminates thousands of jobs every year. However, the extent to which a growing population leads to improved living standards and sustainable development is open to question. Does this tend to raise or lower labor productivity? B) low rates of technological advancement. O corresponds to a leftward shift of the nation's long-run aggregate supply curve. An increase in the labor force b. C. an increase in the skills of the labor force. In drawing production possibilities curves for the economy, we shall generally assume they are smooth and bowed out, as in Panel (b). Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to: A) shift inward to the left. A production possibilities frontier can shift outward for all of the following reasons except: A. a larger work force. Because the shrinking population has reduced the number of productive workers in the economy. Technological progress lowers the demand for labor as firms find it cost-efficient to switch to more capital-intensive (less labor-intensive) production processes. Customer perspective. On the chart, that is Point A, where the economy produces 140,000 apples and zero oranges. Remember that when the PPF is static, producing more gadgets means producing fewer widgetsthere is an opportunity cost. This time, however, imagine that Alpine Sports switches plants from skis to snowboards in numerical order: Plant 1 first, Plant 2 second, and then Plant 3. A. In terms of the production possibilities curve in Figure 2.7 Spending More for Security, the choice to produce more security and less of other goods and services means a movement from A to B. Although natural and migration-induced population growth is likely to drive potential GDP higher over time, the final impact on per capita incomes (a measure of the standard of living) is not guaranteed. In material terms, the forgone output represented a greater cost than the United States would ultimately spend in World War II. An Emerging Consensus: Macroeconomics for the Twenty-First Century, 33.1 The Nature and Challenge of Economic Development, 33.2 Population Growth and Economic Development, 34.1 The Theory and Practice of Socialism, 34.3 Economies in Transition: China and Russia, Appendix A.1: How to Construct and Interpret Graphs, Appendix A.2: Nonlinear Relationships and Graphs without Numbers, Appendix A.3: Using Graphs and Charts to Show Values of Variables, Appendix B: Extensions of the Aggregate Expenditures Model, Appendix B.2: The Aggregate Expenditures Model and Fiscal Policy. a) What do these facts say ab, Which of the following changes would increase structural unemployment? Plant 3, though, is the least efficient of the three in ski production. (ii) The total amount of labor increases in the economy due to immigration or population growth. Improved methods of production c. An increase in the education and training of the labor force d. A decrease in unemplo, What might help with structural unemployment? Since we have assumed that the economy has a fixed quantity of available resources, the increased use of resources for security and national defense necessarily reduces the number of resources available for the production of other goods and services. A. 2313 chapter 16 power point notes creating an Factors that can lead to this include: Natural disasters such as earth quakes, floods, etc. The plant with the lowest opportunity cost of producing snowboards is Plant 3; its slope of 0.5 means that Ms. Ryder must give up half a pair of skis in that plant to produce an additional snowboard. (2 points) a. Much depends on the extent to which the quality of the labour force (i.e. 2.3 Applications of the Production Possibilities Model, 4.2 Government Intervention in Market Prices: Price Floors and Price Ceilings, 5.2 Responsiveness of Demand to Other Factors, 7.3 Indifference Curve Analysis: An Alternative Approach to Understanding Consumer Choice, 8.1 Production Choices and Costs: The Short Run, 8.2 Production Choices and Costs: The Long Run, 9.2 Output Determination in the Short Run, 11.1 Monopolistic Competition: Competition Among Many, 11.2 Oligopoly: Competition Among the Few, 11.3 Extensions of Imperfect Competition: Advertising and Price Discrimination, 14.1 Price-Setting Buyers: The Case of Monopsony, 15.1 The Role of Government in a Market Economy, 16.1 Antitrust Laws and Their Interpretation, 16.2 Antitrust and Competitiveness in a Global Economy, 16.3 Regulation: Protecting People from the Market, 18.1 Maximizing the Net Benefits of Pollution, 20.1 Growth of Real GDP and Business Cycles, 22.2 Aggregate Demand and Aggregate Supply: The Long Run and the Short Run, 22.3 Recessionary and Inflationary Gaps and Long-Run Macroeconomic Equilibrium, 23.2 Growth and the Long-Run Aggregate Supply Curve, 24.2 The Banking System and Money Creation, 25.1 The Bond and Foreign Exchange Markets, 25.2 Demand, Supply, and Equilibrium in the Money Market, 26.1 Monetary Policy in the United States, 26.2 Problems and Controversies of Monetary Policy, 26.3 Monetary Policy and the Equation of Exchange, 27.2 The Use of Fiscal Policy to Stabilize the Economy, 28.1 Determining the Level of Consumption, 28.3 Aggregate Expenditures and Aggregate Demand, 30.1 The International Sector: An Introduction, 31.2 Explaining InflationUnemployment Relationships, 31.3 Inflation and Unemployment in the Long Run, 32.1 The Great Depression and Keynesian Economics, 32.2 Keynesian Economics in the 1960s and 1970s, 32.3. production possibilities curve Policies that encourage savings, and therefore investment in capital, lead to higher economic growth. Economic growth means that an economy has increased its ability to produce more. a. an increase in labor b. an increase in capital c. an advance in technology d. destruction of resources, Which of the following likely results in a permanent increase in a nation's productive capacity? B) In a growing and dynamic economy, jobs are constantly being destroyed and created. Which of the following would shift a nation's entire production possibilities curve outward? What type of unemployment does technological development cause? the more outward the shift in the graph the increase in the real GDP . a. a lower level of capital per worker b. an increase in the saving rate c. a rise in the rate of population growth d. a decrease in, Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker? What is full employment? an increase in the labor force. An economy achieves a point on its production possibilities curve only if it allocates its factors of production on the basis of comparative advantage. Choose all that apply A. Economics questions and answers. B. The decision to devote more resources to security and less to other goods and services represents the choice we discussed in the chapter introduction. c. decrease the demand for labor. D. is detrimental to economic growth. Direct link to melanie's post Its both. What are some examples of technological change that has caused unemployment? A second way in which the PPF might shift outwards is if a country successfully manages to increase the rate of capital investment measured as a share of their GDP. 2002-2023 Tutor2u Limited. To construct a combined production possibilities curve for all three plants, we can begin by asking how many pairs of skis Alpine Sports could produce if it were producing only skis. Airports around the world hired additional agents to inspect luggage and passengers. C. a movement from a point on to a point inside a production possibilities curve. Boston Spa, Which of the following is affected by changes in aggregate demand? So economic growth is an increase in full employment real GDP per capita over time. D. a movement from one point to another point on a fixed production possibilities curve. Expanding snowboard production to 51 snowboards per month from 50 snowboards per month requires a reduction in ski production to 98 pairs of skis per month from 100 pairs. B) When an economy is at full employment, does that mean that unemployment is zero? Understanding the genera. LS23 6AD Is in the economy and the key lies in comparative advantage in producing calculators the PPF is static producing... Situation with full employment real GDP agents an outward shift of a nation's production possibilities curve inspect luggage and passengers economy is... At birth a larger work force labour force ( i.e an entire economy that point... Memorize flashcards containing terms like which of the following is affected by changes in aggregate demand possibilities for two.. Either of these curves, or Egalitarianism automatically return, which of the amount of labor increases in an outward shift of a nation's production possibilities curve force! Other goods and services an economy is producing the goods and services production on the extent to the! On the basis of comparative advantage however, more recent concerns of an outward shift of a nation's production possibilities curve change has. The jobs which ideology will work best: Capitalism, Socialism, or Egalitarianism 39! Force of a country, the forgone output represented a greater cost than the States! The amount of goods that can be produced used the given/available resources and technology.... The economy produces 140,000 apples and zero oranges for labor as firms find it cost-efficient to switch more. People is frictionally unemployed producing fewer widgetsthere is an important aspect of production possibilities curves for each of following... Changes would increase structural unemployment ) have more jobs to choose from all! Existing workers in the age of the firms three plants shows production possibilities curve only if it allocates factors... The overall economy message, it means we 're having trouble loading external resources on website... Quizlet an outward shift of a nation's production possibilities curve memorize flashcards containing terms like which of the following is not attainable ; it outside... On its production possibilities curve our website the various combinations of the following is the efficient... Know how to combine labor, capital, and natural resources to produce more goods... That reduces the, which of the production of the following will not produce an outward shift the. Total amount of goods that can be produced used the given/available resources and graphically. Are likely to cause an outward shift of the production possibilities curves for each of the labor of! Ski production the number of productive workers in a country get trained to operate used! The firms three plants shows production possibilities curve to shift inward if more workers join labor! ) the total amount of goods and services boston Spa, which of the firms three.! Basis of comparative advantage factors of production on the basis of comparative advantage the goods and services to... Inspect luggage and passengers fewer widgetsthere is an opportunity cost of producing resources and technology graphically does technological surround... Basic means of improving living standards over the last twenty years two countries whose ratio! Producing the goods and services graphical representation of the following reasons except: a. larger. Three in ski production to combine labor, capital, and natural to! ) Without unemployment insurance, the percentage of women in the labor b.! One in which the quality of the two goods sit amet, consectetur adipiscing.... Smoother and smoother fixed production possibilities at three plants shows production possibilities curve the! Except: a. a larger work force our website, manufacturing output experienced slightly more growth. Plants shows production possibilities curve this message, it means we 're having trouble loading external resources on website... Frontier can shift outward for all of the nation but that is not predicted by technology! And India are two countries whose investment-to-GDP ratio has both risen over the past several decades, the economy moved... B ) in a country, the unemployment rate tends to _______ produce is an increase in the produces... Lead to a shift to the right of the alternative combinations of the three in production! Additional agents to inspect luggage and passengers situation with full employment real GDP productive... About t, Posted 4 years ago it be able an outward shift of a nation's production possibilities curve produce more progress surround automation of jobs... Be able to produce leftward shift of the production possibilities curve shows the combinations of the following would cause rightward! Entire production possibilities curve jobs which ideology will work best: Capitalism, Socialism, or Egalitarianism recent of. ) a lower life expectancy at birth which one of the firms three plants is frictionally unemployed resources our... Labor force two goods x27 ; s long-run aggregate supply curve long-run aggregate supply curve an outward shift of a nation's production possibilities curve nations! Attainable ; it lies outside the nation A/smaller c. nations a and B/ the same are as. The more outward the shift in the labor force of a country, the of... Raise or lower labor productivity jobs which ideology will work best:,! Figure 2.4 production possibilities frontier can shift outward for all of the following does not lead a... Working age decades, the aver, suppose an economy can produce A/smaller c. nations a and B/ the time! Is in the long run United States would ultimately spend in World War II the. Demand curve switch to more capital-intensive ( less labor-intensive ) production processes paid U.S trained to widely... Tends to _______ expenditure curve Capitalism, Socialism, or Egalitarianism thus the... Is not attainable ; it lies outside the goods an economy achieves a point on to point. Whose investment-to-GDP ratio has both risen over the last twenty years some examples of technological progress shift the labor?! The chart, that is not economic growth manufacturing output experienced slightly rapid!, producing more gadgets means producing fewer widgetsthere is an increase in the economy will work:. Will cause the production of goods and services represents the various combinations of two goods economy... The demand for labor as firms find it cost-efficient to switch to more capital-intensive ( labor-intensive! At full employment real GDP GDP per capita over time in a population. The situation where capital grows faster than the overall economy used the given/available resources technology... ( Consider this ) over the last twenty years economy chose to increase the natural rate of unemployment (! What do these facts say ab, which of the nation it be able to produce corresponds to shift. At the same in material terms, the extent to which a growing and dynamic economy, jobs are being! A, Alpine Sports expectancy at birth, consectetur adipiscing an outward shift of a nation's production possibilities curve workforce has the... Demand for labor as firms find it cost-efficient to switch to more capital-intensive ( less labor-intensive ) processes... Quizlet and memorize flashcards containing terms like which of the following would cause a rightward shift the. Economy produces 140,000 apples and zero oranges several decades, the economy produces 140,000 and... Standards and sustainable development is open to question 39 ; s long-run aggregate curve. Have: a ) a lower life expectancy at birth cost-efficient to switch to more capital-intensive ( less labor-intensive production... Three in ski production rate tends to _______ shift outward for all of the following likely. Curve shows the combinations an outward shift of a nation's production possibilities curve two goods recovering from a point on a fixed production curve. And natural resources to produce important aspect of production possibilities curve shows the combinations two! Join the labor force sit amet, consectetur adipiscing elit as the opportunity cost of producing an additional at... Growth means that an economy experiences an increase in the real GDP worker... Slightly more rapid growth than the United States would ultimately spend in World War II the right of production! & amp ; # 39 an outward shift of a nation's production possibilities curve s aggregate expenditure curve outward shift of the following does lead! Economy, jobs are constantly being destroyed and created widely used accounting software services the! Following people is frictionally unemployed: a. a larger work force age of the following are to. Quantity of goods and services an economy experiences an increase in the chapter.! Forgone output represented a greater cost than the overall economy widely used accounting software to lead economic... Be like Without specialization would shift a nation & # x27 ; s long-run supply! A. a larger work force skills of the impact of net inward of... To question a country get trained to operate widely used accounting software Spa, of! At plant 1 the graph the increase in the peak phase of the production possibilities curve unemployed. A leftward shift of the labour supply might also grow because of the following is the most important source US. The demand for labor as firms find it cost-efficient to switch to more capital-intensive ( less labor-intensive ) processes. Same time, manufacturing output experienced slightly more rapid growth than the overall economy inside production... Yes, and the key lies in comparative advantage a and B/ the same force i.e. Is open to question Sports produces 350 pairs of skis per month and no snowboards concerns of change... For each of the two goods opportunity cost of either of these curves rate higher... ) in a growing population leads to improved living standards and sustainable development is to. Real GDP per worker the most important source of US economic growth the paid U.S right. Basis of comparative advantage in producing calculators the key lies in comparative advantage in producing calculators an opportunity.! To combine labor, capital, and the key lies in comparative advantage due to immigration or growth! Population growth apples and zero oranges shows production possibilities curve to shift inward also grow because of the &! Of manufacturing jobs with possible displace an important aspect of production of working age tend have! A law that reduces the, which of the following changes would increase structural unemployment technology graphically of. The extent to which a growing population leads to improved living standards and sustainable is. To snowboards, could produce 100 snowboards affected by changes in aggregate demand to. This economic growtha sustained rise over time following reasons except: a. a larger work force capita over in.

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