An increase in the population that is unemployed is best represented in Figure 1.2 and using PP1 by movement from point.. Figure 1.2 PPI PP2 Oupt of Bem a) C to point D. b) D to point C. c) C to point A. d) E to point D. earch

An increase in the population that is unemployed is best represented in Figure 1.2 and using PP1 by movement from point.. Figure 1.2 PPI PP2 Oupt of Bem a) C to point D. b) D to point C. c) C to point A. d) E to point D. earch

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter2: Production Possibilities Frontier Framework

Section: Chapter Questions

Problem 1QP

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An increase in the population that is unemployed is best represented in Figure 1.2 and using PP1
by movement from point..
Figure 1.2
PPI
PPZ
Outper of Bro
a) C to point D.
b) D to point C.
c) C to point A.
d) E to point D
o 門
search
hp

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Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. The maximum output combinations of both goods are given in the table below: Combination Shoes ComputersShoes ComputersA 0 1000B 100 900C 200 750D 300 550E 400 300F 500 0 i. Draw the PPF using your knowledge about the shape and slope of PPC.ii. Does the PPF have the expected shape? iii. Explain why your PPF in (a) above depicts that shape.iv. How many computers could society produce if it was willing to do without shoes?v. Why are points outside the frontier unattainable?vi. Identify three ways by which the economy can attain the level of production outside the PPF. vii. What happens to the PPF when technological change overwhelmingly favours the production of computers?viii. What happens to the PPF when the economy discovers an improved technology for producing shoes?
Consider the possibility that government spending increases produc- tivity so that with lump sum taxes after an increase in government spending the original equilibrium level of consumption and leisure is still just affordable. (That is this point lies on the frontier of both the before and after PPFs. Be careful to make sure your drawing has this very unusual feature.) How will an increase in government spending affect consumption, hours worked, output and welfare?
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Assume a country produces haircuts and shirts with inputs of labour. The country has 100 hours of labour available. A haircut requires 30 minutes of labour, while a shirt requires 2 hours of labour. Solvve sub-parts as well. a. Construct country’s production- possibility frontier. b. Suppose there is an increase in the labour hours from 1,000 to 1,500 labour hours. Indicate on the PPF how it will impact the production, if at all and brief explain why?