A technological advance would be best represented by: A shift out of the production possibility curve. An inward shift of the production possibilities curve. A movement from inside the production possibility curve to a point on the production possibility curve. A movement of the production possibility curve to a point inside the production possibility curve. SD Housing Office Buildings Figure 1.1 Production Possibility Curve When does society produce a little of each type of structure, but still produce inefficiently? (See Figure 1.1.) ОА OB Ос If market signals lead to pollution beyond the ideal level, then. The economy knows the failure of government. The laissez-faire OA approach will reduce the level of pollution. The market mechanism has failed to achieve social efficiency The government allocates resources inefficiently. Which of the following will cause the production possibility curve to shift inward? An increase in the OA population a decrease in the size of the OA workforce a technological advancement an increase in knowledge
(1) A technological advance allows the economy to produce more
goods and services with a given level of resources. That’s to say
represented by a displacement outside the possibilities of production
curve.
Answer: option (A)
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(2) Any point in the PPC reflects the reachable, but
inefficient mix of goods and services.
Any point of the PPC reflects potential and effectiveness
combination of goods and services.
Any point outside of PPC reflects the unreachable combination
of goods and services with a given level of resources.
Point C socially produces a part of each type of structure, but
still producing inefficiently.
Answer: Option (C), i.e. point C
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(3) If market signals lead to pollution beyond the ideal
level, then the market mechanism failed to reach
Efficiency
Answer: option (C)
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(4) A production possibility curve will shift inward if there is
it’s a drop in a certain level of resources, a degradation of technology.
Thus, a decrease in the size of the labor force will displace PPC
on the inside.
Answer: option (B)