Consider the Production Possibilities Frontier (PPF) for a country, Theophili. Using a diagram, show whether each of the following events causes the PPF to contract, expand, or not change at all. Assume that Theophili can either produce candles or liturgical books.

a) The country experiences immigration of skilled workers.

b) An earthquake destroys half of the country’s factories, and kills half of its workers.

c) A new technology improves the production process of both candles and liturgical books.

d) Theophili transitions from a dictatorship to a democracy with well-entrenched property rights.

e) The country introduces tari?s (taxes) on imports, hence reducing its trade with other nations.

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Impact of events on Theophilis PPF Heres a diagram of the PPF for Theophili along with explanations ... View the full answer