Figure 2.10 Figure 2.10 shows various points on three different production possibilities frontiers for a nation.
Alt text for Figure 2.10: In figure 2.10, a graph comparing 3 different production possibilities frontiers for a nation.
Long description for Figure 2.10: The x-axis is labelled, plastic products, and the y-axis is labelled, food products.3 convex curves are shown, with points V, W, X, Y, and Z plotted.The first curve begins just past the half-way point on the y-axis, and ends just past the half-way point on the x-axis.Points W and X are plotted along the curve, with point W approximately 1 third of the way from the start of the curve, and point X more than 2 thirds of the way along the curve.The second curve begins almost 3 quarters of the way up the y-axis and ends just past the termination of the first curve on the x-axis.Point Y is plotted on the second curve, approximately 2 thirds of the way along the curve.The third curve begins at the same point as the second curve, and ends approximately 3 quarters of the way along the x-axis.Point Z is plotted on the third curve, a little less than half-way along the curve.Point V is plotted between the first curve and the origin.
-Consider the following events:
a.a reduction in the patent protection period to no more than 2 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
Refer to Figure 2.10.Which of the events listed above could cause a movement from W to V?
A)a only
B)a and b only
C)a and c only
D)b and c only
E)a, b, and c

Question

Figure 2.10  Figure 2.10 shows various points on three different production possibilities frontiers for a nation.
Alt text for Figure 2.10: In figure 2.10, a graph comparing 3 different production possibilities frontiers for a nation.
Long description for Figure 2.10: The x-axis is labelled, plastic products, and the y-axis is labelled, food products.3 convex curves are shown, with points V, W, X, Y, and Z plotted.The first curve begins just past the half-way point on the y-axis, and ends just past the half-way point on the x-axis.Points W and X are plotted along the curve, with point W approximately 1 third of the way from the start of the curve, and point X more than 2 thirds of the way along the curve.The second curve begins almost 3 quarters of the way up the y-axis and ends just past the termination of the first curve on the x-axis.Point Y is plotted on the second curve, approximately 2 thirds of the way along the curve.The third curve begins at the same point as the second curve, and ends approximately 3 quarters of the way along the x-axis.Point Z is plotted on the third curve, a little less than half-way along the curve.Point V is plotted between the first curve and the origin.
-Consider the following events:
a.a reduction in the patent protection period to no more than 2 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
Refer to Figure 2.10.Which of the events listed above could cause a movement from W to V?
A)a only 
B)a and b only 
C)a and c only 
D)b and c only 
E)a, b, and c

Quizplus · Accepted Answer

A reduction in the patent protection period to no more than 2 years would affect the production possibilities frontiers by limiting the ability of firms to invest in the creation of new products and technologies, but it would not cause a movement from W to V. Similarly, a war that destroys a substantial portion of a nation's capital stock would decrease the nation's overall production capabilities, but it would not specifically cause a movement from W to V. However, the lack of a secure and enforceable property rights system could cause a movement from W to V by discouraging firms from investing in the development of new products and technologies, as they would have less confidence that their investments would be protected and that they would be able to profit from them. This could result in a shift back towards more traditional production methods that are less reliant on proprietary knowledge and technologies.

Figure 210 Figure 2