The figure given below represents an economy producing corn and planes under different economic situations.Figure 2.2

-Refer to Figure 2.2. If there is an increase in the effectiveness of pesticides, which of the following graph(s) will represent(s) the resulting shift in the production possibilities curve [PPC]?

Question

The figure given below represents an economy producing corn and planes under different economic situations.Figure 2.2
 
-Refer to Figure 2.2. If there is an increase in the effectiveness of pesticides, which of the following graph(s) will represent(s) the resulting shift in the production possibilities curve [PPC]?

Quizplus · Accepted Answer

An increase in the effectiveness of pesticides would enable more efficient production of corn, and thus increase its output. However, the production of planes would not be affected by this change. This would result in an outward shift of the PPC, as shown in Graph B. Therefore, only Graph B would represent the resulting shift in the PPC.

The Figure Given Below Represents an Economy Producing Corn and Planes