Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas

Hotels are a capital good that,once built, will help produce still more consumption goods. If Puerto Rico produces more hotels than Hawaii,
A) Hawaii's PPF will shift outward further than Puerto Rico's PPF.
B) Hawaii's PPF will shift inward.
C) Puerto Rico's PPF will not shift.
D) Puerto Rico's PPF will shift outward further than Hawaii's PPF.
E) Puerto Rico's and Hawaii's PPF will shift outward by the same amount.


D

Economics

You might also like to view...

According to Chandler (1977), the major event in business development in 1895–1904 was

(a) the Granger cases. (b) Munn v Illinois (1877). (c) the rise of vertically integrated firms. (d) the merger wave.

Economics

An increase in demand and a decrease in supply cause which of the following?

a. Equilibrium price change is indeterminate. b. Equilibrium quantity decreases. c. Equilibrium price falls. d. Equilibrium price rises. e. Equilibrium quantity increases.

Economics

Suppose that due to a severe drought in Texas, 100,000 farmers relocate from Texas to Louisiana. Assuming that land and labor are complements in a farming production function, what would happen to the wages earned by workers and the rents earned by landowners in Louisiana?

a. Both wages and rents would increase. b. Both wages and rents would decrease. c. Wages would increase, and rents would decrease. d. Wages would decrease, and rents would increase.

Economics

An inflationary expenditure gap is the amount by which:

A. equilibrium GDP falls short of the full-employment GDP. B. aggregate expenditures exceed any given level of GDP. C. saving exceeds investment at the full-employment GDP. D. aggregate expenditures exceed the full-employment level of GDP.

Economics