- Refer to Figure 17.3.Assume X units of plants and equipment wear out each year.What will happen to the PPC in the future if the economy currently produces at point Z?

Question

Quizplus · Accepted Answer

If the economy is producing at point Z, it is likely operating beyond its sustainable capacity, leading to overuse and wear out of plants and equipment. This will cause the production possibilities curve (PPC) to shift inward in the future as resources become depleted or less efficient.