BuyFind

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617383
BuyFind

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
Publisher: Cengage Learning
ISBN: 9781337617383

Solutions

Chapter
Section
Chapter 33, Problem 1QP
Textbook Problem

Although a production possibilities frontier is usually drawn for a country, one could be drawn for the world. Picture the world’s production possibilities frontier. Is the world positioned at a point on the PPF or below it? Give a reason for your answer.

Expert Solution
To determine

The position of world’s production possibility frontier.

Explanation of Solution

Most probably, the world’s position in the production possibility frontier is below the frontier. This is because there is a decrease in world’s production and consumption due to the trade restrictive measures adopted by the nations, such as quota and tariff. The nations produce and consume more if there are no restrictions. This is because they would not get any benefit with trade restrictive measures.

Economics Concept Introduction

Production possibilities frontier: PPF refers to the different combinations of goods and services that can be produced efficiently with the given resources by a firm.

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