Question

Shifting Production Possibilities) Determine whether each of the following would cause the national economy’s PPF to shift inward, outward, or not at all:
An increase in average length of annual vacations
An increase in immigration
A decrease in the average retirement age
The migration of skilled workers to other countries

Answer 1

Answer: PPF (production–possibility frontier) is a graphical representation showing all the possible outcomes of output for products using all factors of production, where resources are fully and efficiently utilized. This frontier or curve shifts with varying inputs.

Explanation: The four factors would affect the curve thus;

1. An increase in average length of annual vacations would decrease the amount of labor available thereby the curve will- shift inward

2. An increase in immigration would

increase the amount of labor available resulting in the curve- shifting outward

3. A decrease in the average retirement age would decrease the amount of labor available and the curve will- shift inward

4. The immigration of skilled workers to other countries would decrease the amount of labor available and the curve will - shift inward