Question

write your answers to questions 12 and 13 in the space provided.
12 what two things would cause the ppf of an economy to shift to the right (outward)?
13 what would cause the ppf of an economy to shift to the left (inward)?
use the \shifts in the ppf\ graph to answer questions 14 - 19. assume that the ppf begins at the location labeled \c\. read question 14 and determine the direction (left or right) that the ppf will move from the location c in response to the event described. then write the letter of the new location. now read question 15 and determine the direction the ppf will move from the location you decided on in question 15. then write the letter of the new location. continue to determine the direction and location for each subsequent event.

1. the invention of the light bulb allows laborers to work later hours and introduces the midnight shift.

direction of shift: __________ new location of ppf: __________

1. a major drought makes much of americas farmland unproductive.

direction of shift: __________ new location of ppf: __________

1. the baby boomer generation starts to retire, and millions leave the workforce.

direction of shift: __________ new location of ppf: __________
17 the invention of the internet allows people to communicate and conduct business from anywhere.
direction of shift: __________ new location of ppf: __________
18 the government loosens immigration policies, allowing millions of skilled workers to enter the country.
direction of shift: __________ new location of ppf: __________
19 the invention of the cell phone allows people to communicate from remote locations.
direction of shift: __________ new location of ppf: __________
20 some economists argue that unemployment is the main issue that should concern government officials, because unemployment represents underutilized resources. which of the following situations best describes this view of unemployment?
a a point inside the ppf b a point outside the ppf c a point on the ppf curve

Explanation:

Step1: Understand PPF shifts

The Production - Possibility Frontier (PPF) shifts right when there is an increase in resources, technological progress, or improvement in productivity. It shifts left when there is a decrease in resources.

Step2: Analyze question 14

The invention of the light - bulb increases productivity as laborers can work longer hours. So, the PPF shifts right. Starting from C, the new location is D.
Direction of Shift: Right
New Location of PPF: D

Step3: Analyze question 15

A major drought reduces the productive capacity of farmland (a resource). So, the PPF shifts left. Starting from D, the new location is C.
Direction of Shift: Left
New Location of PPF: C

Step4: Analyze question 16

The retirement of baby - boomers reduces the labor force (a resource). So, the PPF shifts left. Starting from C, the new location is B.
Direction of Shift: Left
New Location of PPF: B

Step5: Analyze question 17

The invention of the internet is a technological progress that increases productivity. So, the PPF shifts right. Starting from B, the new location is C.
Direction of Shift: Right
New Location of PPF: C

Step6: Analyze question 18

The loosening of immigration policies increases the labor force (a resource). So, the PPF shifts right. Starting from C, the new location is D.
Direction of Shift: Right
New Location of PPF: D

Step7: Analyze question 19

The invention of the cell - phone is a technological progress that increases productivity. So, the PPF shifts right. Starting from D, the new location is E.
Direction of Shift: Right
New Location of PPF: E

Step8: Analyze question 20

Unemployment represents underutilized resources. A point inside the PPF shows that resources are not fully utilized. So the answer is A.

Answer:

1. Direction of Shift: Right, New Location of PPF: D
2. Direction of Shift: Left, New Location of PPF: C
3. Direction of Shift: Left, New Location of PPF: B
4. Direction of Shift: Right, New Location of PPF: C
5. Direction of Shift: Right, New Location of PPF: D
6. Direction of Shift: Right, New Location of PPF: E
7. A. a point inside the PPF