Question

Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to a. a gain of resources. b. a loss of resources. c. technological improvement in the production of both goods. d. a new law that interfaces with productive efficiency.

Answer 1

Answer:

new law that interfaces with productive efficiency.

Explanation:

The Production possibility curve shows all the two combination of goods or services that can be produced in an economy given its resources and technology. Carrying out production on the production possibility curve is efficient. Carrying out production to the right of the production possibility curve or outside the curve is impossible. Carrying out production inside or to the left of the production possibility indicates inefficiency in production .

Technological improvement and a gain of resources shifts the curve outward.

A loss of resocurces pushes the curve inward.

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