Answer to Question #177778 in Economics for Taie

Question

assume that a certain simplified economy produces only two goods. x and y, with given resources. calculate the opportunity cost of the production of goods. b. what changes are required for this economy to shift the ppf outward?

Answer 1

a. The opportunity cost of moving from one efficient combination of production to another efficient combination of production is how much of one good is given up in order to get more of the other good.

b. Ways of causing an outward shift of a country's PPF are: investment in capital and new technology, inward migration of younger, skilled workers, discovery of new natural resources.