ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a movement along the curve.
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an outward shift of the curve.
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a movement from a point inside the curve to a point closer to the curve.
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an inward shift of the curve.
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Detailed explanation-1: -Therefore, a shift from inside the production possibility curve to a point on it reflects increase in utilization of resources, and thus a decrease in unemployment.
Detailed explanation-2: -In a production possibility curve, unemployment will be shown as a point inside the curve. All the points on the curve show that all the resources in the economy are being fully utilized in an efficient manner. Labor is also a type of resource.
Detailed explanation-3: -Shifts in the production possibilities curve are caused by things that change the output of an economy, including advances in technology, changes in resources, more education or training (that’s what we call human capital) and changes in the labour force.
Detailed explanation-4: -So if there is increase in the availability of the resources in the economy then automatically the overall output in the economy increases which shifts the PPC to the right.
Detailed explanation-5: -The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.