Answer to Question #75830 in Economics for Tendai

Question

A community in Northern Namibia produces only two goods, TVs AND CDs. With the aid of properly labelled production possibilities curves illustrate each of the following (putting TVs on the vertical axis). a) A shift in production from CDs (services) towards TVs (goods). b) An increase in the potential output of the community due to a greater availability of the factors of production. Please draw diagram Please provide references

Answer 1

a) A shift in production from CDs (services) towards TVs (goods) - a movement along the curve.
b) An increase in the potential output of the community due to a greater availability of the factors of production - PPC will shift outwards (to the right).