Chapter $2.$ Production Possibilities Frontier $($PPF$)$ Framework: Pre$-$Class & In$-$Class Activities Packet

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Part $3.$ Discussion Questions and Problems.

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

$($a$)$ an increase in the number of illegal immigrants entering the country,

$($b$)$ a war that takes place on U$.$S$.$ soil,

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

$($d$)$ a decrease in the unemployment rate,

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

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

$($a$)$ the finiteness of resources in

$($b$)$ choice;

$($c$)$ opportunity cost;

$($d$)$ productive efficiency.

$($e$)$ unemployed resources.

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

Give an example to illustrate each of the following:

$($a$)$ constant opportunity costs :

$($b$)$ increasing opportunity costs:

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

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 increase in th

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

Explain how to derive a production possibilities frontier. For instance, how is the extreme point on the vertical axis identfied? How is the extreme point on the horizontal axis identif$-{?}^{-n}$

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

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.

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