Question

Determine how each of the following would affect the U.S. Production Possibilities Frontier (PPF).

Scenario Shift Outward Shift Inward Movement to a Point Closer to the Frontier Movement to a Point Inside the Frontier
1. An increase in the number of illegal immigrants
2. A war that takes place on U.S. soil
3. A decrease in the unemployment rate
4. The discovery of a new oil field
5. A law that requires individuals to enter lines of work for which they are not suited

Answer 1

1. shift outward

2. shift inward

3. movement to a point closer to the frontier

4. shift outward

5. movement to a point inside the frontier

Step-by-step explanation:

1. An increase in the number of illegal immigrants - shift outward

Causing the increase the number of cheap labor which can produce more goods in the economy.

2. A war that takes place on U.S. soil - shift inward

The war destroys the capital of the country which means that less can be produced.

3. A decrease in the unemployment rate - movement to a point closer to the frontier

The decrease in unemployment rate means more efficient utilization of resources.

4. The discovery of a new oil field - shift outward

The New oil field means that cheaper oil which will increase the production of goods in the economy .

5. A law that requires individuals to enter lines of work for which they are not suited - movement to a point inside the frontier

The Law that requires individuals to jobs for which they are not suites will lead to inefficient use of resources.