Question 88 – 1.1 Economic methodology and the economic problem - Questions

An economy is initially operating at point $A\,$ on its production possibility frontier ( $PPF_1$ ), as shown in the diagram below.

Production Possibility Frontier Diagram

The government implements policy measures to shift production along $PPF_1\,$ from point $A\,$ to point $B$ .

Which row in the table below correctly identifies the short-term change in the production of consumer goods, and the long-term effect on the economy's productive capacity (the potential shift from $PPF_1\,$ to $PPF_2$ )?

	Short-term change in the production of consumer goods	Long-term effect on the economy's productive capacity
Row A	Decrease	Increase (shift to $PPF_2$ )
Row B	Decrease	No change (remain at $PPF_1$ )
Row C	Increase	Increase (shift to $PPF_2$ )
Row D	Increase	No change (remain at $PPF_1$ )

An economy is initially operating at point $A\,$ on its production possibility frontier ( $PPF_1$ ), as shown in the diagram below.

Production Possibility Frontier Diagram

The government implements policy measures to shift production along $PPF_1\,$ from point $A\,$ to point $B$ .

	Short-term change in the production of consumer goods	Long-term effect on the economy's productive capacity
Row A	Decrease	Increase (shift to $PPF_2$ )
Row B	Decrease	No change (remain at $PPF_1$ )
Row C	Increase	Increase (shift to $PPF_2$ )
Row D	Increase	No change (remain at $PPF_1$ )

1.1 Economic methodology and the economic problem

Question 14

1.1 Economic methodology and the economic problem

Question 14

1.1 Economic methodology and the economic problem

Question 14

1.1 Economic methodology and the economic problem Questions

1.1 Economic methodology and the economic problem

Question 14

1.1 Economic methodology and the economic problem Questions