Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 2 - Part I - Thinking Like an Economist - Quick Check Multiple Choice: 4


c. move the economy along the production possibilities frontier

Work Step by Step

The production possibilities frontier represents the various combinations of two outputs that an economy can produce given the available factors of production and technology. Therefore, the curve will only contract or expand due to a change in available factors of production or technology. The discovery of the health benefits of hot dogs only changes consumers’ preferences and does not decrease or increase the resources necessary to produce hot dogs and hamburgers. As a result, the curve will stay in its current position, and the economy will produce more hot dogs and fewer hamburgers on a different point on the curve to represent an increased consumer preference for hot dogs.
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