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.an increase in the patent protection period to 75 years
B.a hurricane that destroys a substantial portion of a nation's capital stock
C.the implementation of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to Z?
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.an increase in the patent protection period to 75 years
B.a hurricane that destroys a substantial portion of a nation's capital stock
C.the implementation of a secure and enforceable property rights system
Which of the events listed above could cause a movement from W to Z?
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

An increase in patent protection period to 75 years (option A) could cause a shift from point W to point Z as it would incentivize innovation and technological progress. The implementation of a secure and enforceable property rights system (option C) could also cause a shift from W to Z as it would encourage investment and protect property rights, leading to economic growth. However, a hurricane that destroys a substantial portion of a nation's capital stock (option B) would not cause a shift from W to Z as it would decrease the nation's production capacity, shifting the production possibility frontier to the left, resulting in movement from W to a point inside the same frontier.

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