(Figure: Interpreting PFF Shifts 4) The graph depicts the effects of an improvement in technology. One can conclude from the graph that the technology

Question

Quizplus · Accepted Answer

The technology improvement caused a greater increase in the production of good y compared to the production of good x, as shown by the shift in the Production Possibility Frontier (PPF) curve towards y-axis. The points A and B on the original PPF represent the maximum combination of x and y that could be produced before the technology improvement. However, after the improvement, the PPF curve shifts outwards, indicating that more of both goods can be produced. However, the shift is more pronounced for the production of good y. Therefore, the technology improvement affected the production of y more than the production of x, leading to an increase in the relative production of y.

(Figure: Interpreting PFF Shifts 4) the Graph Depicts the Effects