Answer to Question #75851 in Economics of Enterprise for Akhona Boyce

Question

A community in Northern Namibia produces only two goods, TVs and CDs. With the aid of properly labelled production possibilities curves illustrate each of the following (putting TVs on the vertical axis) : 2.1.1 A shift in production from CDs (services) TVs (goods) , 2.1.2 An increase in the potential output of the community due to a greater availability of the factors of production

Answer 1

2.1.1 A shift in production from CDs (services) towards TVs (goods) is a movement along the production possibilities curve.
2.1.2 If there is an increase in the potential output of the community due to a greater availability of the factors of production, then PPC will shift outwards (to the right).