Question

Like physical capital, human capital produced in the present can be applied to the production of future goods and services. Consider the table in Problem 2-13, and suppose that the nation’s residents are trying to choose between combination C and combination F. Other things being equal, will the future production possibilities curve for this nation be located farther outward if the nation chooses combination F instead of combination C? Explain.

Short answer

No, the production possibilities curve for the nation will not be located farther outward if the nation chooses combination F instead of combination C.

Step-by-step solution

Step 1. Given Information.

The data for the units of consumer goods and units of human capital is as follows:

Production Combinations	Units of Consumption Goods	Units of Human Capital
A	0	100
B	10	97
C	20	90
D	30	75
E	40	55
F	50	30
G	60	0

Step 2. Reason.

No, the production possibilities curve for the nation will not be located farther outward if the nation chooses combination F instead of combination C. The combination C produces 90 units of human capital which are farther to the right than combination F which produces 30 units of human capital.