On a production possibility frontier (PPF), a fall in the level of unemployment would be shown by:Question 10Select one:a.a movement along the PPF.b.the PPF shifting inward.c.a movement from a point inside the PPF to a point closer to PPF.d.a movement from a point on the PPF to a point inside the PPF.
Question
On a production possibility frontier (PPF), a fall in the level of unemployment would be shown by:Question 10Select one:a.a movement along the PPF.b.the PPF shifting inward.c.a movement from a point inside the PPF to a point closer to PPF.d.a movement from a point on the PPF to a point inside the PPF.
Solution
The correct answer is c. A movement from a point inside the PPF to a point closer to PPF.
Here's why:
The Production Possibility Frontier (PPF) is a curve that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed.
If an economy is operating inside the PPF, it means that it's not fully utilizing its resources, and there is unemployment or underemployment.
So, if the level of unemployment falls (meaning more people are getting jobs and resources are being used more fully), the economy would move closer to its PPF. This is represented by a movement from a point inside the PPF to a point closer to the PPF.
This movement indicates an increase in efficiency as the economy is now producing more goods and services with the same amount of resources.
Similar Questions
Suppose that there is a positive productivity shock to all goods and services. This can be represented on the Production Possibility Frontier (PPF) as: Group of answer choicesA shift outwards of the frontierA convex curvature of the frontierA flattening of the frontierA shift inwards of the frontierNo change in the frontier
A production possibility frontier (curve) would shift inwards if:Question 5Select one:a.inefficiency in the production process occurs.b.unemployment exists.c.productive land is lost due to salinity.d.there is no new technology.
Use the figure below to answer the next question.An increase in an economy's labor productivity wouldMultiple Choicemove the economy away from point A and toward point B.move the economy away from point B and toward point A.shift the production possibilities frontier from AB to CD.shift the production possibilities frontier from CD to AB.
An improvement in technology will cause:(a) The PPF to shift inwards towards the origin;(b) The PPF to shift outwards away from the origin;(c) The economy to move down the PPF which will not have shifted;(d) The economy to shift upwards along the PPF.
2 How is an immediate effect of an increase in unemployment illustrated on a production possibility curve diagram?1 pointA a movement of the production point closer to the curveB a movement of the production point further inside the curveC a shift of the production possibility curve inwardsD a shift of the production possibility curve outwardsClear selection
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