As Economics help

This is an 8 mark question that I need help in.
There's an exploration of an important natural resource and at the same time the productivity of workers has fallen in an economy. explain how such events can affect the production possibility curve of a country.

Reply 1

hellomynameisr

12

So what do you know about the factors that can impact a PPF?

Reply 2

adam9317

15

Original post by Ansari_uzair

This is an 8 mark question that I need help in.
There's an exploration of an important natural resource and at the same time the productivity of workers has fallen in an economy. explain how such events can affect the production possibility curve of a country.

If you look at the first part, we would see the production possibility curve [PPC] increase/ move outwards, as potentially we will have an increase in resources.
But, if productivity falls, we will not see the PPC move [It only moves if a chance in quantity/ quality of resources or state in technology] yet, we will be operating at some point, inside/ below the PPC, as resources are not being used as efficiently as possible [To operate on the curve you need full employment of resources and to utilise them fully]

IE curve will shift outwards for the first bit, and then second bit we will see us operating at a point inside the curve.

Hope this helps

Reply 3

Ansari_uzair

OP

5

Original post by adam9317

If you look at the first part, we would see the production possibility curve [PPC] increase/ move outwards, as potentially we will have an increase in resources.
But, if productivity falls, we will not see the PPC move [It only moves if a chance in quantity/ quality of resources or state in technology] yet, we will be operating at some point, inside/ below the PPC, as resources are not being used as efficiently as possible [To operate on the curve you need full employment of resources and to utilise them fully]

IE curve will shift outwards for the first bit, and then second bit we will see us operating at a point inside the curve.

Hope this helps

So in the second bit, the curve will pivot inwards right? should i make two seperate graphs to show the movement or should I make one diagram to show that the curve has shifted outwards but pivot shifted inwards?

Reply 4

adam9317

15

Original post by Ansari_uzair

So in the second bit, the curve will pivot inwards right? should i make two seperate graphs to show the movement or should I make one diagram to show that the curve has shifted outwards but pivot shifted inwards?

In my eyes it wouldn't pivot inwards, you would retain the same shape; yet you would put an X somewhere inside the curve, and say thats where you are operating.

Yes, I would put it on 2 graphs, makes it far easier