BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

Solutions

Chapter
Section
BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

Describe how each of the following would affect the U.S. PPF: (a) a war that takes place on U.S. soil, (b) the discovery of a new oil field, (c) a decrease in the unemployment rate, and (d) a law that requires individuals to enter lines of work for which they are not suited.

(a)

To determine

Changes in U.S PPF.

Explanation

A war taken place in the US soil leads to reduction in capital stock, potential resources and also kills people. This in turn shifts the US’s PPF inward.

Concept

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(b)

To determine

Changes in U.S PPF.

Explanation

The discovery of new oil field increases the US’s resources. Thus, it shifts the PPF of U.S outward.

Concept

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(c)

To determine

Changes in U.S PPF.

Explanation

Decreasing unemployment rate represented by the movement of a point that is below the PPF to another point that is near or on the frontier.

Concept

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

(d)

To determine

Changes in U.S PPF.

Explanation

The new law decreases the productive efficiency of the labor that leads to the movement of a point which is on the frontier to the point that is inside the frontier.

Concept

Production possibilities frontier (PPF) curve: PPF curve refers to the combinations of goods and services that can be produced using available resources.

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

CALCULATING THE WACC Here is the condensed 2014 balance sheet for Skye Computer Company (in thousands of dollar...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Find all the answers to your study problems with bartleby.
Textbook solutions plus Q&A. Get As ASAP arrow_forward