An increase in the labor force b. A shift from service to manufacturing jobs. 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. This production possibilities curve shows an economy that produces only skis and snowboards. Whichofthefollowingwillbemostlikelytocausetheproductionpossibilitiescurvefora, Accordingtomarginalanalysis,youshouldspendmoretimestudyingeconomicsiftheextra. There were no instances of technological innovation. (Many students are helped when told to read this result as 2 pairs of skis per snowboard.) We get the same value between points B and C, and between points A and C. Figure 2.2 A Production Possibilities Curve. c. A decrease in productivity. If that curve shifts out, the capacity to produce has increased. c. An increase in the unemployment rate. What type of unemployment does technological development cause? It retains its negative slope and bowed-out shape. When an economy is operating on its production possibilities curve, we say that it is engaging in efficient production. How many jobs were lost, as a result, in a labor force of 175 million? B) When an economy is at full employment, does that mean that unemployment is zero? A production possibility frontier (PPF) illustrates the combinations of output of two products that a country can supply using all of their available factor inputs in an efficient way. B. Proponents of economic growth say that pollution: Inefficient production implies that the economy could be producing more goods without using any additional labor, capital, or natural resources. C) Rapid population growth that increases the burden on the education. rightward shift of the nation's long-run aggregate supply curve. For a nation's real GDP per capita to rise during a year: or comparing changes in potential military strength and political preeminence, the most. Vinfens strategy map for fiscal 2006 shows how it is building from its mission to accelerating organizational learning and elevating agency performance through its balanced scorecard perspectives to bring value to the customer supported by operational excellence. The opportunity cost of the first 200 pairs of skis is just 100 snowboards at Plant 1, a movement from point D to point C, or 0.5 snowboards per pair of skis. Had the firm based its production choices on comparative advantage, it would have switched Plant 3 to snowboards and then Plant 2, so it would have operated at point C. It would be producing more snowboards and more pairs of skisand using the same quantities of factors of production it was using at B. Two years later she added a third plant in another town. But when the frontier shifts outward, it is possible to produce more of both goods. Which of the following would shift a nation's entire production possibilities curve outward? The next 100 pairs of skis would be produced at Plant 2, where snowboard production would fall by 100 snowboards per month. D a natural disaster like a hurricane or bad earthquake. B) The emigration of highly skilled workers to rich countries. B) In a growing and dynamic economy, jobs are constantly being destroyed and created. In the table, it is defined as "a sustained increase in real GDP per capita over time," but, later on in the article, it is stated as being "an increase in the capacity to produce.". Economics questions and answers. D. Enhanced quantity and quality of human resources, Economic growth can best be portrayed as a: Such an allocation implies that the law of increasing opportunity cost will hold. Phan Trng Khi EBBA 12 Multi choice 1 KTCC chng 1.docx, Screenshot_20220715-202023_Office_15_07_2022_20_29.jpg, Association, Correlation & Regression Paper.docx, person looks sounds or acts needs patient validation after stating observations, Scientific Method Test Living Environment september 2020.doc, Which of the following is not among the factors im pacting job dissatisfaction, Question 109 Question 109 Incorrect Incorrect Which of the following are options, CALCULATING A BINOMIAL DISTRIBUTION USING MINITAB Flowchart.docx, Question 93 Incorrect 000 points out of 100 Not flaggedFlag question Question, 03 Proving that the limit does not exist.pdf, BSBCMM412 Student Assessment Tasks v1 2021.docx, Screen Shot 2022-06-01 at 10.13.34 PM.png, 9 MCQ only - Please check the attachment - Detail solution not required 1. Comparative advantage thus can stem from a lack of efficiency in the production of an alternative good rather than a special proficiency in the production of the first good. An economy grows when it has the capacity to produce more. Many countries, for example, chose to move along their respective production possibilities curves to produce more security and national defense and less of all other goods in the wake of 9/11. ensures the nation of an increase in real GDP per capita. a. economic growth b. technological change c. productivity growth d. capital deepening. Economists call this economic growtha sustained rise over time in a nation's production of goods and services. The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. Thus, the economy chose to increase spending on security in the effort to defeat terrorism. Economic growth means that an economy has increased its ability to produce more. (iii) There is a technological breakthrough th. Tel: +44 0844 800 0085. We often think of the loss of jobs in terms of the workers; they have lost a chance to work and to earn income. Nam lacinia pulvinar tortor nec facilisis. Because a shrinking population has reduced the number of productive workers in the economy. Suppose there are 100 million workers in the economy, and full employment is defined as 96% of them being employed. 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. C. average family size in the United States. Similarly, policies that encourage technological change, such as tax credits for research and development, also lead to more economic growth. These resources were not put back to work fully until 1942, after the U.S. entry into World War II demanded mobilization of the economys factors of production. Direct link to melanie's post Economic growth is being , Posted 3 years ago. an increase in the labor force. Remember that when the PPF is static, producing more gadgets means producing fewer widgetsthere is an opportunity cost. Here, we have placed the number of pairs of skis produced per month on the vertical axis and the number of snowboards produced per month on the horizontal axis. Explain. Because technological innov. a sustained increase in real GDP per capita over time, improvements in education, knowledge, and wealth that make each unit of labor more productive, government policies that promote rightward shifts of aggregate supply, such as increasing labor force participation and incentives to save and invest. B. a larger number of employees. B. B. labor costs and thus shifted the nation's production possibilities curve inward. Put calculators on the vertical axis and radios on the horizontal axis. the more outward the shift in the graph the increase in the real GDP . C. Inside its PPC A. a. West Yorkshire, Airports around the world hired additional agents to inspect luggage and passengers. Plant 3, though, is the least efficient of the three in ski production. 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? Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to: A) shift inward to the left. C)producingmoreconsumerandfewercapitalgoods. A. People work and use the income they earn to buyperhaps importgoods and services from people who have a comparative advantage in doing other things. China and India are two countries whose investment-to-GDP ratio has both risen over the last twenty years. Join us in London, Birmingham, Bristol or Portsmouth for a Grade Booster Cinema Workshop and smash your exams this summer! Much depends on the extent to which the quality of the labour force (i.e. b. This is a result of transferring resources from the production of one good to another according to comparative advantage. Direct link to melanie's post Its both. copyright 2003-2023 Homework.Study.com. Understanding and creating graphs are critical skills in macroeconomics. Lorem ipsum dolor sit amet, consectetur adipiscing elit. d. Destruction of resources. With all three of its plants producing skis, it can produce 350 pairs of skis per month (and no snowboards). The bowed-out production possibilities curve for Alpine Sports illustrates the law of increasing opportunity cost. a. For each of the following, compute the future value: Find (a) the exact interest and (b) the ordinary interest to the nearest cent. (i) The total amount of capital increases in the economy. It can produce skis and snowboards simultaneously as well. Having an efficient financial system Show the impact that an increase in the supply of loanable funds would have on the PPC of an economy. Its resources were fully employed; it was operating quite close to its production possibilities curve. Select one: a. If more workers join the labor force of a country, the unemployment rate tends to _______. (a) increase (b) remain the same (c) None of the above. a. A.Still on its PPC This spending took a variety of forms. \end{bmatrix} Neither skis nor snowboards is an independent or a dependent variable in the production possibilities model; we can assign either one to the vertical or to the horizontal axis. D. a movement from one point to another point on a fixed production possibilities curve. Understanding the genera. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. b. downward shift of the nation's aggregate expenditure curve. As a result of a failure to achieve full employment, the economy operates at a point such as B, producing FB units of food and CB units of clothing per period. Figure 2.9 Efficient Versus Inefficient Production illustrates the result. Pellentesque dapibus efficitur laoreet. A. An economy's factors of production are scarce; they cannot produce an unlimited quantity of goods and services. 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. b. A technology breakthrough that deploys resources more resourcefully and enhances the generation of both capital goods and consumer goods will cause the production possibilities curve to shift outward as demonstrated on the graph below. Second, it might not allocate resources on the basis of comparative advantage. Internal perspective C. Fal, What eventually happens, economically, if more and more job openings continue to arise, but there aren't enough people to fill them? When devoted solely to snowboards, it produces 100 snowboards per month. 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. In this example, production moves to point B, where the economy produces less food (FB) and less clothing (CB) than at point A. An economy that is operating inside its production possibilities curve could, by moving onto it, produce more of all the goods and services that people value, such as food, housing, education, medical care, and music. A. Which of the following is most likely to increase the natural rate of unemployment? In Panel (a), a point such as N is not attainable; it lies outside the . We will make use of this important fact as we continue our investigation of the production possibilities curve. It will cause the PPF to shift . Factors that can lead to this include: Natural disasters such as earth quakes, floods, etc. Distinguish between economic growth and economic development? To put this in terms of the production possibilities curve, Plant 3 has a comparative advantage in snowboard production (the good on the horizontal axis) because its production possibilities curve is the flattest of the three curves. a. an increase in the labor force b. improved methods of production c. a decrease in unemployment d. an increase in the education and training of the labor forc. These values are plotted in a production possibilities curve for Plant 1. Employment and prices but not total output c. Prices and total output but not employment d. Prices, employment and total output. Suppose Alpine Sports operates the three plants we examined in Figure 2.4 Production Possibilities at Three Plants. And what are some examples of new technologies that have created jobs? That is because the resources transferred from the production of other goods and services to the production of security had a greater and greater comparative advantage in producing things other than security. d. increase the demand for labor. B. C. work-activity rate. iv. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions. A movement from A to B requires shifting resources out of the production of all other goods and services and into spending on security. $52,610 at$8 12\frac{1}{2}21%$ for 82 days. The gains we achieve through specialization are enormous. D. an improvement in technology. Its land is devoted largely to nonagricultural use. Learn more about how Pressbooks supports open publishing practices. increasing the quantity of a society's labor force improving a society's technological knowledge upgrading the quality of a nation's human resources reducing unemployment. The plant for which the opportunity cost of an additional snowboard is greatest is the plant with the steepest production possibilities curve; the plant for which the opportunity cost is lowest is the plant with the flattest production possibilities curve. How does cyclical unemployment relate to a nation's production possibilities curve and how does cyclical unemployment behave across the business cycle? In Panel (a) we have a combined production possibilities curve for Alpine Sports, assuming that it now has 10 plants producing skis and snowboards. A. In the summer of 1929, however, things started going wrong. Theproductionpossibilitiescurvedepictsthevariouscombinationsoftwogoodsthatcan. Could an economy that is using all its factors of production still produce less than it could? Economists conclude that it is better to be on the production possibilities curve than inside it. a. It has an advantage not because it can produce more snowboards than the other plants (all the plants in this example are capable of producing up to 100 snowboards per month) but because it is the least productive plant for making skis. In this case we have categories of goods rather than specific goods. B. an inward shift of the production possibilities curve. On the chart, that is Point A, where the economy produces 140,000 apples and zero oranges. Option 1 - could reduce the nation's real GDP An outward shift production possibility curve denotes increase in production and increase in production means increase in GDP therefore. We have already seen that an additional snowboard requires giving up two pairs of skis in Plant 1. key elements of the model. Inward shifts in production possibility frontier means that the economy is shrinking i.e. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. The exhibit gives the slopes of the production possibilities curves for each plant. a. more fluid labor markets b. worker retraining c. more technological change d. none of the above, Which of the following is most likely to lead to sustained long-run growth? 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. 2002-2023 Tutor2u Limited. B. They continued to fall for several years. Linear, negative relationship between the production possibilities curve for Alpine Sports operates the three ski. ; they can not produce an unlimited quantity of goods and services and graphs. Ultrices ac magna spending took a variety of forms read this result as 2 pairs of per! But not employment d. 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