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Chapter 2: Q. 2.23 (page 47)

Suppose that in Fig 2-4, the nation currently has sufficient resources to produce combinations located along only the innermost production possibilities curve. In addition, suppose that the nation's residents have determined that smartphones function mainly as consumption goods while tablet devices function primarily as capital goods. If the nation produces no additional tablets this year, will the intermediate-shifted PPC resulting from minimal economic growth or the farthest shifted PPC caused by more significant economic growth be more likely to apply next year?

Short Answer

Expert verified

No it won't.

Step by step solution

01

Step1. Given information

Given it is that the nation does not have enough resources and can only produce at the inner, inferior combinations of the PPC curve.

02

Step2. Explanation

The growth of any country is linked to the production of capital goods primarily. If a country is able to produce more, that is because the support of the production of capital goods exist. But, here since the question says there is no production of capital goods, there might not be any expansion of production. So, there is no shift in PPC/PPF.

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Most popular questions from this chapter

Discuss why obtaining increasing increments of any particular good typically entails giving up more and more units of other goods.

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