Imagine an economy that produces only pancakes and maple syrup. a. Draw the PPF and label the
Question:
Imagine an economy that produces only pancakes and maple syrup.
a. Draw the PPF and label the axes. Explain why it has the shape that it does.
b. Choose 2 efficient points and label them A and B.
c. Choose 2 points that are impossible and label them C and D.
d. Now imagine that workers in the economy begin to emigrate (move to other countries), will this shift the PPF? If so, draw a new graph showing the original PPF and the PPF after this change.
e. Go back to the original graph before anything happens in part b. Now instead, imagine that workers in the economy get an additional year of education, where they learn the best ways to make pancakes and maple syrup. Will this shift the PPF? If so, draw a graph showing the original PPF and the PPF after this change
Expert Answer:
The PPF for an economy that produces only pancakes and maple syrup would have the shape of a convex ... View the full answer
