Question

11 Explain how (if at all) each of the following events affects the location of a country's production possibilities curve: LO5 a. The quality of education increases. b. The number of unemployed workers increases. c. A new technique improves the efficiency of extracting copper from ore. d. A devastating earthquake destroys numerous production facilities.

Answer 1

11.

A. With the increase in quality of education Thus the individual wilbe skilled and efficiency will increase. The PPC will shift outwards.

B. The number of unemployed workers increase then the output will decline due to under utilization of available resources. But this will not have any impact on the location of the PPC.

C. A new technique will increase the output therefore, PPC will shift outwards.

D. Earthquake has destroyed a number of plants so the Production will decline. Hence, PPC will shift inwards.

7. A. Since it is stating about overall economy therefore it is Macroeconomic.

B. Since, here one firms action has been mentioned. Therefore, it will be studied under Microeconomics.

C. Since it has hampered Citrus crop so it will be studied under Microeconomics.

D. Inflation is a factor which influence whole economy. Hence, it is studied under Macroeconomics.

E. One bank lowered the rate so, Microeconomics.

F. CPI is a factor which influence whole economy hence it is studied under Macroeconomics.

Please contact if having any query thank you.