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.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

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.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

Quizplus · Accepted Answer

An increase in the patent protection period (a) and an improved property rights system (c) both enhance incentives for innovation and investment, potentially leading to economic growth and a movement from V to W. An increase in capital stock (b) typically affects production capacity rather than innovation incentives.

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