Chapter $2.$ Production Possibilities Frontier $($PPF$)$ Framework: Pre$-$Class & In$-$Class Activities.Packet vame$/$ I.D$.$ Number:

Section: Date:

Part $3.$ Discussion Questions and Problems.

$1.$Describe how each of the following would affect the U$.$S$.$ production possibilities fronfier $($PPF$)$:

$($b$)$ a war that takes place on U$.$S$.$ soil, cophel of couetry shtf th priduche $($dawn$.$ weres$)$

$($c$)$ the discovery of a new oil field, outarands

$($d$)$ a decrease in the unemployment rate, will not shlf the pata cha vessilitiby

$($e$)$ a law that requires individuals to enter lines of work for which they are not suited. I curve liffwad.

$2.$ Explain how the following can be represented in a PPF framework:

$5.($a$)$ the finiteness of resources implicit in the scarcity condition;

$($b$)$ choice;

$6.($c$)$ opportunity cost;

$($d$)$ productive efficiency;

$7.($e$)$ unemployed resources.

$3.$ What condition must hold for the PPF to be bowed outward $($concave downward$)?$ To be a straight line?

$4.$ Give an example to illustrate each of the following:

$($a$)$ constant opportunity costs :

$($b$)$ increasing opportunity costs:

$5.$Why are most production possibilities frontiers $($PPFs$)$ for goods bowed outward $($concave downward$)?$

$6.$ Within the PPF framework, explain each of the following:

$($a$)$ a disagreement between a person who favors more domestic welfare spending and one who favors more national defense spending;

$($b$)$ an ir

$($c$)$ a technological change that makes resources less specialized.

$7.$ Explain how to derive a production possibilities frontier. For instance, how is the extreme point on the vertical axis identified? How is the extreme point on the horizontal axis identified?

$8.$ If the slope of the production possibilities frontier is the same between any two points, what does this imply about costs? Explain.

$9.$ Suppose a nation's PPF shifts inward as its population grows. What happens, on average, to the material standard of living of the people? Explain.

$10.$ Can a technological advancement in sector $"x"$ of the economy affect the number of people who work in sector $"Y"$ of the economy? Explain.