📚 Learning Guide
Production Possibilities Curve Shifts
hard

A country experiences a significant technological advancement in its agricultural sector. How should this development be categorized in relation to the Production Possibilities Curve (PPC)?

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Choose the Best Answer

A

Outward shift of the PPC due to increased productive capacity

B

Inward shift of the PPC reflecting reduced resources

C

Movement along the PPC representing a change in resource allocation

D

No shift in the PPC as technology does not affect production

Understanding the Answer

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Answer

When a country experiences a significant technological advancement in its agricultural sector, it means that farmers can produce more food using the same amount of resources. This improvement allows the country to increase its overall production capacity, which is represented by an outward shift of the Production Possibilities Curve (PPC). The PPC shows the maximum possible output of two goods, like food and clothing, given certain resources. For example, if a new type of seed allows farmers to grow 20% more crops, the curve shifts outward, indicating that the country can now produce more food without sacrificing clothing production. This shift reflects a more efficient use of resources and a higher potential for economic growth.

Detailed Explanation

When technology improves farming, the country can produce more food. Other options are incorrect because This choice suggests that resources are reduced; This option implies that production changes without increasing capacity.

Key Concepts

Production Possibilities Curve Shifts
Technological Advancements
Economic Growth
Topic

Production Possibilities Curve Shifts

Difficulty

hard level question

Cognitive Level

understand

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