Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation.
-Refer to Figure 2-4.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 secure and enforceable property rights system
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 2-4  Figure 2-4 shows various points on three different production possibilities frontiers for a nation.
-Refer to Figure 2-4.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 secure and enforceable property rights system
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 would affect the production of goods and services but would not necessarily shift the production possibilities frontier outwards. Similarly, a war that destroys a substantial portion of a nation's capital stock would shift the production possibilities frontier inwards. However, the lack of secure and enforceable property rights system would cause a reduction in investment, leading to a decrease in the production possibilities frontier. Therefore, event C is the only one that could cause a movement from W to V on the production possibilities frontier.

Figure 2-4 Figure 2-4 Shows Various Points on Three