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Chapter 9: Q.1 (page 209)

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

Expert verified

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

01

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.

02

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.

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Most popular questions from this chapter

On the basis of the information in Problem $9 - 10$ and reference to Table $9 - 3$ , about how many more dollars' worth of real GDP per capita would the person in China be earning $50$ years from now than the individual in Mozambique?

Per capita real GDP grows at a rate of $3$ percent in country $F$ and at a rate of $6$ percent in country $G$ . Both begin with equal levels of per capita real GDP. Use Tablerole="math" localid="1651526847805" $9 - 3$ to determine how much higher per capita real GDP will be in country $G$ after $20$ years. How much higher will real GDP be in country $G$ after $40$ years?

A nation's capital goods wear out over time, so a portion of its capital goods become unusable every year. Last year, its residents decided to produce no capital goods. It has experienced no growth in its population or in the amounts of other productive resources during the past year. In addition, the nation's technology and resource productivity have remained unchanged during the past year. Will the nation's economic growth rate for the current year be negative, zero, or positive?

Consider the following table displaying annual growth rates for nations $X, Y$ and $Z$ , each of which entered $2017$ with real per capita GDP equal to $$ 20, 000$ .

a. Which nation most likely experienced a sizable earthquake in late $2017$ that destroyed a significant portion of its stock of capital goods, but was followed by speedy investments in rebuilding the nation's capital stock? What is this nation's per capita real GDP at the end of $2020$ , rounded to the nearest dollar?

b. Which nation most likely adopted policies in 2017 that encouraged a gradual shift in production from capital goods to consumption goods? What is this nation's per capita real GDP at the end of $2020$ , rounded to the nearest dollar?

c. Which nation most likely adopted policies in $2017$ that encouraged a quick shift in production from consumption goods to capital goods? What is this nation's per capita real GDP at the end ofrole="math" localid="1651525075599" $2020$ , rounded to the nearest dollar?

Consider Figure 9-8. According to rule of 70, about how many years would have been required for US per capita real GDP to double if it had remained at the average level observed between 1961 and 1980 ? Between 2001 and 2017 .?

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