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PPF - Outward Shifts quiz

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  • What does an outward shift of the PPF represent?
    An outward shift of the PPF represents an increase in a society's production capabilities, allowing more of one or both goods to be produced.
  • How does a technological advancement in only one industry affect the PPF?
    A technological advancement in one industry shifts the PPF outward for that specific good, while the maximum production of other goods remains unchanged.
  • What happens to the production of robots if only pizza-making technology improves?
    The maximum number of robots that can be produced stays the same, but resources can be reallocated to produce more robots if pizza production becomes more efficient.
  • What is an example of a general increase in resources or technology?
    Examples include population growth, immigration, acquiring new resources like oil, or technological advancements that benefit multiple industries.
  • How does a general increase in resources or technology affect the PPF?
    A general increase shifts the entire PPF outward, increasing the production possibilities for all goods.
  • Why are inward shifts of the PPF considered rare?
    Inward shifts are rare because they usually require catastrophic events, such as a meteor strike or massive loss of resources.
  • What does it mean if only one side of the PPF moves outward?
    It means that only one good's production capability has increased due to an industry-specific improvement.
  • How can improved efficiency in one good lead to increased production of another good?
    Improved efficiency frees up resources, which can then be reallocated to produce more of the other good.
  • What does the PPF model help us visualize?
    The PPF model helps us visualize the trade-offs and production capabilities of an economy given its resources and technology.
  • What is the typical direction of PPF shifts over time?
    PPF shifts are typically outward, reflecting growth and increased productivity in the economy.
  • If a new computer benefits all industries, how does the PPF change?
    The entire PPF shifts outward, allowing for increased production of all goods.
  • What is the effect on the PPF if a society acquires more labor through immigration?
    The PPF shifts outward, indicating greater production potential for all goods.
  • What does it mean if the maximum production of robots stays the same after a technological improvement?
    It means the technological improvement was specific to another good, such as pizza, and did not affect robot production directly.
  • What kind of event could cause the PPF to shift inward?
    A catastrophic event, such as a meteor strike or massive resource loss, could cause the PPF to shift inward.
  • Why might a society choose not to increase production of a good even after a technological improvement?
    The society may already be satisfied with the current production level, and instead use the freed resources to increase production of other goods.