Shifting the Production Possibilities Curve - Macro Topic 1.2 (Micro Topic 1.3)

Mr. Clifford explains the production possibilities curve and how it shifts due to changes in resources, technology, and trade. He provides examples to illustrate these shifts and discusses the impact of various scenarios on the curve, such as technological advancements, resource destruction, unemployment, and education improvements.

What does a point inside the production possibilities curve represent?

• Inefficient use of resources

• Maximum production capacity

• Efficient use of resources

• Unattainable production level

How does trade affect a country's production possibilities curve?

• It enables the country to consume more than it produces.

• It shifts the curve inward.

• It allows the country to produce more than before.

• It has no effect on the curve.

What happens to the production possibilities curve when there is an improvement in technology?

• The curve becomes a straight line.

• The curve remains unchanged.

• The curve shifts outward.

• The curve shifts inward.

In the event of a recession with high unemployment, how is the production possibilities curve affected?

• The curve becomes a straight line.

• The curve shifts inward.

• The curve shifts outward.

• The curve remains unchanged, but production is inside the curve.

What is the effect of increased education on the production possibilities curve?

• The curve becomes a straight line.

• The curve shifts outward.

• The curve remains unchanged.

• The curve shifts inward.