If rice production is land intensive and computer production is labor intensive,

Question

If rice production is land intensive and computer production is labor intensive, though both good require some land and labor, the two-good production possibilities frontier will change in which of the following ways given an increase in available labor? a. The curve will shift outward evenly. b. The curve will shift outward but biased toward rice. c. The curve will shift outward but biased toward computers. d. The curve will shift inward with a bias toward rice. Please give a brief explanation on your answer.

Explanation / Answer

c. The curve will shift outward but biased toward computers.

Increase of labour will favour computer production. However, since Rice production also requires labour, hence it will favour that too but less as compared to computers.

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