GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Because shrinking population has reduced the number of productive workers in the economy
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Because technological innovations have increased the productivity of labor and capital
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Because damage to natural resources, such as might be caused by deforestation leading to erosion of topsoil, has shrunk the land resource.
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Because of unemployment or underemployment of labor, perhaps due to discrimination against employing workers of a certain race or gender.
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Detailed explanation-1: -Which of the following reasons might explain why an economy would be operating inside its production possibilities curve (PPC)? Because shrinking population has reduced the number of productive workers in the economy.
Detailed explanation-2: -When an economy is operating on its production possibilities curve, we say that it is engaging in efficient production. If it is using the same quantities of factors of production but is operating inside its production possibilities curve, it is engaging in inefficient production.
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 labor force.