Question

Assume that an economy produces only two goods, pizza and wings, and that it is producing on its production possibilities frontier (PPF). If the economy can only produce two goods, in which ways would allow the economy to produce even more pizza?

Answer 1

Answer:

- growth in labour force

- improved pizza making technology

Explanation:

A production possibility frontier is a curve that shows the combinations of 2 products that can be manufactured given the available resources.

That means given the resources available there is no way a different combination of products can be manufactured.

In the given scenario there has to be an increase in resources for more pizzas to be produced.

There are two options that will allow more pizza to be produced:

- if there is growth in labour force, the production of both wings and pizzas will increase.

- of there is improved pizza making technology, the amount of pizzas produced will increase