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6 Oct 2020
An economy can produce various combinations of food and shelter along a production possibilities curve (PPC). Suppose a technological innovation resulted in a new, higher-yielding crop that generated more bushels of grain for a given set of land, labor, and capital resources. If this innovation did not affect the productivity of shelter production, which of the following would be true?
a. The PPC will shift outward equally along both axes of the graph.
b. The PPC will rotate inward along the food axis, but will not shift on the shelter axis.
c. The PPC will rotate outward along the food axis, but will not shift on the shelter axis.
d. The PPC will not change.
An economy can produce various combinations of food and shelter along a production possibilities curve (PPC). Suppose a technological innovation resulted in a new, higher-yielding crop that generated more bushels of grain for a given set of land, labor, and capital resources. If this innovation did not affect the productivity of shelter production, which of the following would be true?
a. The PPC will shift outward equally along both axes of the graph.
b. The PPC will rotate inward along the food axis, but will not shift on the shelter axis.
c. The PPC will rotate outward along the food axis, but will not shift on the shelter axis.
d. The PPC will not change.
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Insha FatimaLv10
20 Oct 2020