Figure 2.3

Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3. Consider the following events:
A.a reduction in the patent protection period to no more than two years
B.a war that destroys a substantial portion of a nation's capital stock
C.the lack of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to V?

Question

Figure 2.3
  
Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3. Consider the following events:
A.a reduction in the patent protection period to no more than two years
B.a war that destroys a substantial portion of a nation's capital stock
C.the lack of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to V?

Quizplus · Accepted Answer

A lack of secure and enforceable property rights system could cause a movement from point W to point V because it would decrease the efficiency of the economy and reduce the productivity of resources. The reduction in patent protection period to no more than two years or a war that destroys a substantial portion of a nation's capital stock would likely cause a shift or rotation of the entire production possibility frontier, rather than a movement from point W to point V.

Figure 2.3 Figure 2.3 Shows Various Points on Three Different Production Possibility