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.
Question
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.
Solution
The production possibility frontier (PPF) represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed. If the PPF shifts inwards, it indicates that the economy's maximum potential output has decreased.
Here are the options:
a. Inefficiency in the production process occurs: This could potentially cause the PPF to shift inwards because inefficiency means that resources are not being used to their full potential, reducing the maximum possible output.
b. Unemployment exists: Unemployment could cause the PPF to shift inwards because it means that not all of the economy's labor resources are being used. However, the existence of unemployment does not necessarily mean that the PPF will shift inwards, as it depends on the extent and duration of the unemployment.
c. Productive land is lost due to salinity: This would cause the PPF to shift inwards because the loss of productive land means that the economy has fewer resources to produce goods and services.
d. There is no new technology: The lack of new technology would not necessarily cause the PPF to shift inwards. It might prevent the PPF from shifting outwards, as new technology can increase the efficiency of production, but it would not cause a decrease in the economy's maximum potential output.
So, the most accurate answer is c. Productive land is lost due to salinity.
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