Answer to Question #206182 in Microeconomics for qianhe

Question

Production at Point A - 0 Tubas & 25 dishwashers 

Production at Point B - 30 Tubas & 20 dishwashers 

Production at Point C - 50 Tubas & 10 dishwashers 

Production at Point D - 60 Tubas & 0 dishwashers 

Production at Point E - 40 Tubas & 20 dishwashers 

Production at Point F - 30 Tubas & 10 dishwashers 

Using the production possibilities frontier above:

Draw a new graph and explain what would happen to the production possibilities frontier if there were a technological breakthrough in producing tubas. 

Answer 1

A technological breakthrough in producing tubas will increase the productivity of tubas and thus will lead the production possibilities frontier outwards towards the side of the tubas but maintaining the production of dishwashers. Since the breakthrough pushes some of the resources away, there will be a slight increase in the production of dishwashers but the impact will not be the same of tubas.