Question 4 Classify each of the following as a movement along or a shift of the production function and provide a justification for your choice. (iv) The government invests in a new entrepreneurship training program (v) The government implements major reforms to make it easier to transact business
Question 4 Classify each of the following as a movement along or a shift of the production function and provide a justification for your choice. (iv) The government invests in a new entrepreneurship training program (v) The government implements major reforms to make it easier to transact business
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter16: Economies In Transition
Section: Chapter Questions
Problem 8SQP
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Transcribed Image Text:Question 4
Classify each of the following as a movement along or a shift of the production function and provide a justification for your choice.
(iv) The government invests in a new entrepreneurship training program
(v) The government implements major reforms to make it easier to transact business
Expert Solution
Step 1
The production possibility frontier is an economy model that depicts the link between the input resources and output level. It takes two products at a time and describes the trade-off between them.
Step 2
(iv) Here, given that the government invested money in introducing a new entrepreneurial training program. This program will improve the productivity of the workers due to which they can produce more of both the products. As a result, there will be an outward shift in PPF.
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