b. there will be more inefficiency c. of inflationary pressures. d. workers are
ID: 1141680 • Letter: B
Question
b. there will be more inefficiency c. of inflationary pressures. d. workers are not equally suited to all tasks. 15. Adding more resources causes a. the production possibilities curve to shift in. b. the production possibilities curve to shift out. c, upward movement along a production possibilities curve d. downward movement along a production possibilities curve. Exhibit 2-18 Production possibilities curves Year X Capital goods 16. In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This country a. is producing the same number of capital goods in both years b. is producing the same number of consumption goods in both years c. has shown no growth between Year X and Year Y d. has higher unemployment in Year X than in Year Y 17. In Exhibit 2-17, if countries A and B currently have the same production possibilities curve (PPC) as given in the figure, but this year country A locates at point A on its PPC and country B locates at point B on its PPC, then country A: Exhibit 2-17 Production possibilities curve Consumption goods Capital goodsExplanation / Answer
Answer : 15) The answer is option b.
The product possibilities curve move to outward when production level increase. The increase in production level requires more resources to use in production process. As additional more resources increase the production level, hence it shift the production possibility curve to outward.
16) The answer is option b.
Because according to given diagram, the horizontal axis measures capital goods and vertical axis measures consumption goods. The line which adds both point A and point B is horizontal which means that the production level of consumption goods remains same at both point A and point B. But this horizontal line which adds both point A and point B shows that the production level of capital goods is higher at point B than point A. Therefore, option b is correct.
17) Based on given informations and given diagram we get that country A produces more consumption goods and less capital goods than the country B. Because here both points A and B lies on the same PPC and on the same PPC increase in production of one good decrease the production of another good.
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