Using a production possibilities frontier determine how does a country's PPF change in response to the events described below. Make sure to explicit what sectors are you representing and what sort of assumption each event implies (neutral effect vs a sector biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing. 1.reducing import taxes (tariffs)on primary inputs 2.increasing the expenditure on research and development 3.the introduction of greater flexibility in labour markets(new government laws enabling easier hiring of workers)
Using a production possibilities frontier determine how does a country's PPF change in response to the events described below. Make sure to explicit what sectors are you representing and what sort of assumption each event implies (neutral effect vs a sector biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing. 1.reducing import taxes (tariffs)on primary inputs 2.increasing the expenditure on research and development 3.the introduction of greater flexibility in labour markets(new government laws enabling easier hiring of workers)
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 10SQ
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Using a production possibilities frontier determine how does a country's PPF change in response to the events described below.
Make sure to explicit what sectors are you representing and what sort of assumption each event implies (neutral effect vs a sector biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing.
1.reducing import taxes (tariffs)on primary inputs
2.increasing the expenditure on research and development
3.the introduction of greater flexibility in labour markets(new government laws enabling easier hiring of workers)
4.increasing skilled migration into a country
5.the discovery of new mineral deposits in a country.
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