Purchase Solution

effect of this new technology on the production possibility curve

Not what you're looking for?

Ask Custom Question

A nation with fixed quantities of resources is able to produce any of the following combinations of bread and ovens.

Loaves of Bread Ovens
(Millions) (Thousands)
75 0
60 12
45 22
30 30
15 36
0 40

These figures assume that a certain number of previously produced ovens are available in the current period for baking bread.

A. Using the data in the table, graph the ppf (with ovens on the vertical axis).
B. If this country chooses to produce both ovens and bread, what will happen to the ppf over time? Why?

Now suppose that a new technology is discovered that allows twice as many loaves of bread to be baked in each existing oven.

C. Illustrate (on the original graph) the effect of this new technology on the production possibility curve.
D. Suppose that before the new technology is introduced, the nation produces 22 ovens. After the new technology is introduced, the nation produces 30 ovens. What is the effect of the new technology on the production of bread? (Give the number of loaves before and after the change).

Attachments
Purchase this Solution
Solution Summary

The effect of this new technology on the production possibility curve is depicted.

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Production Possibility Curve

    The diffusion of new technology is sometimes called a "positive spill-over effect"

    An outward shift of the production possibility frontier implies that the opportunity cost of production has fallen.

  • The real deficit

    No, this is not true. It is on the production possibility curve and the allocation reflects people's tastes for lots of lawns, technological advances in producing crops, and the globalization of agricultural markets.

  • Long Run and Short Run Aggregate Supply

    Please refer to the following as an example citation: https://brainmass.com/content/faq#faq16 The effect of an in increase in factors of production on the AS curve.

  • production curve

    If so, is this society on its new production possibilities curve if it produces 20 million tons of food and 16 million tractors? Plot the new production possibilites curve. At which point along the horizontal axis doe the new curve cut the axis?

  • Automobiles vs Forklifts: Production Possibility Comparison

    Is production at a point outside the production possibilities curve currently possible? Could a future advance in technology allow production beyond the current production possibilities curve?

  • PPF responses to various events

    However, if the war requires the government to invest heavily in new technology, this could increase AS and expand the PPF. c. New resources shift the PPF outward. d.

  • Fundamental economic concept of opportunity costs

    What was the effect on the standard of living among trading nations?

  • Production possibilities frontier

    Is it operating on its production possibilities curve? If not, what facts might account for this? No, it is not operating on the curve.

  • International Trade

    Dictionary - www.netmba.com/econ/micro/production/possibility/ This response presents a brilliant discussion on International Trade

View More Related Solutions