Question

The graph to the right shows a production possibilities curve for 2020 and two potential production possibilities curves for 2021, denoted${2021}_A$ and${2021}_B$

a. Which of the labelled points corresponds to the maximum feasible 2020 production that is more likely to be associated with the curve denoted${2021}_A$ ?

b. Which of the labelled points corresponds to the maximum feasible 2020 production that is more likely to be associated with the curve denoted${2021}_B$ ?

Short answer

a. point Y is more likely to be associated with the curve denoted${2021}_A$

b. point X is more likely to be associated with the curve denoted${2021}_B$

Step-by-step solution

introduction

In the given graph the focuses X and Y show the degrees of creation where the assets can be effectively used in capital goods and utilization products though point Z features the wasteful usage of accessible assets.

explanation

The vertical change in the PPC is a result of the development in innovation, accessibility of additional assets, and so forth. The vertical shift of the bend of ${2021}_A$states that there has been improvement in the innovation or different variables and subsequently the point X of 2020 is bound to be related to it. The vertical shift of the bend of ${2021}_B$shows that there has been improvement in the innovation or different figures more than that ${2021}_A$and subsequently the point X of 2020 is bound to be related to it.