Multiple Choice
The country of Clutchtopia has just stumbled upon a new technology as shown on the graph. If Clutchtopians demand 3 million pizza bagels, what is the productively efficient increase in robot production?
2. Introductory Economic Models
PPF - Outward Shifts
Multiple Choice
The country of Clutchtopia has just stumbled upon a new technology as shown on the graph. What type of PPF shift did Clutchtopia experience?
A
Technological advance in the production of robots
B
Technological advance in the production of pizza bagels
C
General increase in the productivity of technology
D
Decrease in pizza bagel production efficiency
Verified step by step guidance1
Examine the graph provided, which is a Production Possibility Frontier (PPF) showing the trade-off between two goods: robots and pizza bagels.
Notice the two curves on the graph: the original PPF (solid line) and the new PPF (dashed line). The shift from the solid line to the dashed line indicates a change in production capabilities.
Observe that the new PPF (dashed line) is outward from the original PPF, indicating an increase in production capacity.
Focus on the axis labels: the vertical axis represents robots (in thousands) and the horizontal axis represents pizza bagels (in millions).
Determine the nature of the shift: since the new PPF allows for more robots to be produced without reducing the production of pizza bagels, this suggests a technological advance specifically in the production of robots.
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