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Refer to Figure 2-4, Graph (a) and Graph (b)
Refer to Figure 2-4, Graph (a) and Graph (b) . A shift of the economy's production possibilities frontier from Graph (a) to Graph (b) could be caused by a. an improvement in donut production technology.
b. an improvement in both donut and coffee production technology. c. unemployment. d. an improvement in coffee production technology.
Expert Solution
The correct option is A " An improvement in donut production technology". We can see that there was shift in PPF and donuts' production increased to 6 But there is no change in the quantity of coffee produced. So, we can say that right shift in PPF is due to technological improvement in the production of donuts.
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