Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 1 - Limits, Alternatives, and Choices - Problems - Page 23: 7

Answer

The orange area is the new production possibility curve; the blue is the old one.

Work Step by Step

If we assume a technological advance has made the production of forklifts 1.5 times more effective, we have to multiply the number of forklifts by 1.5 in the table and redraw the plot. Same goes for automobiles. If the technological advance has made the production of both goods more effective we multiply all the values in the table by 1.5 and redraw the plot.
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