Answer to Question #155212 in Microeconomics for Ankit Adak

Question

Draw a PPC showing changes for each of the following for an economy producing both pizza and robots:

a. New robot making technology.

b. Decrease in the demand for pizza

c. Mad cow disease kills 85% of cows

Answer 1

a. New robot making technology will shift the PPF outwards.

b. Decrease in the demand for pizza will cause the move along the PPF without its change.

c. If mad cow disease kills 85% of cows, then the PPf will shift inwards.