imagine-an-economy-that-can-produce-either-computers-or-textiles-if-a-new-techno

Question

Imagine an economy that can produce either computers or textiles. If a new technology improves computer production, how should the PPF be adjusted?

Accepted Answer

The PPF should shift outward on the axis representing computers, indicating increased production capacity for computers.

Answer

The PPF should shift inward on the axis representing textiles, indicating decreased production capacity for textiles.

Answer

The entire PPF should shift outward, indicating increased production capacity for both goods.

Answer

The PPF should remain unchanged as the technology only affects one good.