Answered: Explain how the following situation…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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CHOOSE THE ANSWER FOR EACH QUESTION, FROM THIS LIST

a)Reduction in resources

b) Pivot outwards along the computer axis

c)Unused Resources

d)Increased production given resources

e)Pivot outwards along the car axis

f)PPF shift outwards

g)Produce outside PPF

h)Produce inside PPF

i)PPF shifts inwards

j)Increase in resources

Explain how the following situation would affect a nation's production possibilities curve.
A country produces cars and computers. A new technology that saves time in the car production
process is discovered and implemented.
What happens to PPF Choose...
Explanation
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Expert Solution

Step 1: Define PPF

The production possibilities frontier (PPF) is a curve that depicts an economy's maximum potential output for two goods or services (here, cars and computers), based on its technology and resources, assuming they are used efficiently. The PPF showcases the trade-offs between producing one good versus the other, highlighting the opportunity cost of resource allocation for various tasks.

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