Question

Draw a Production Possibilities Curve for the relationship between gun production and butter production. Show what would happen if there was a technical change in which affected the production of butter only. How would you represent economic growth with the curve? How would you represent unemployment? Make sure to properly label your graph.

Answer 1

Since the production possibility can be defined as a line which is summation of different combinations of two different goods which can be produced with the available resources by using it efficiently. If the technology improves or resources increase, then the PPF shifts outwards.

PPF shift right word towards butter because Technology affect only butter. Gun ydd Butter

hun PPF PP2 им е роде outward shift of PPF from PPF, to PPF shows Economic growth polut Ainsite PPF shows unemplayment.