Question

There is a production possibilities frontier (PPF) that shows the combinations of goods X and Y that can be produced in the economy. The point where the PPF touches the good-X axis is at 40 units of good X and the point where the PPF touches the good-Y axis is at 60 units. As a result of an increase in resources that can be used for the production of only good Y, the PPF
a. shifts leftward, and the point at which the PPF touches the good-X axis has to be something less than 40 units of good X.
b. shifts rightward, and the point at which the PPF touches the good- X axis has to be something more than 40 units of good X and the point at which the PPF touches the good-Y axis has to be something more than 60 units.
c. shifts leftward, and the point at which the PPF touches the good-X axis has to be something less than 40 units of good X and the point at which the PPF touches the good-Y axis has to be something less than 60 units.
d. shifts rightward, and the point at which the PPF touches the good- X axis is at 40 units of good X and the point at which the PPF touches the good-Y axis has to be something more than 60 units.
e. none of the above

Answer 1

Answer:

d. shifts rightward, and the point at which the PPF touches the good- X axis is at 40 units of good X and the point at which the PPF touches the good-Y axis has to be something more than 60 units

Explanation:

The production possibility frontier is a curve that shows the two combinations of goods and services produced in an economy when all its resocurces are fully employed.

The production possibility frontier is downward sloping. It shows that as more of one product is produced, less of the other product would be produced.

The production possibility frontier shifts outward as a result of increase in available resources or technological advancement.

An increase in resources that can be used for the production of only good Y, shifts the ppf outward, to the right. More of good Y would he produced and the production of good X would remain unchanged.

I hope my answer helps you