What happens to the Production Possibility Frontier (PPF) when productivity only increases in one good?

We start here with an initial PPF which shows the possible combinations of apples and computers that an economy can produce with the resources it has. If a new way of creating computer chips makes the computer industry more productive and the apple farming industry is unaffected, then the PPF will move out in the direction of computer production, but not in apple production.

MD

Related Economics A Level answers

All answers ▸

Assess the extent to which a depreciation of the Pound will positively effect economic performance within the Uk.


Why does the marginal cost curve cross the average cost curve at its lowest point?


Consider Donald Trump chooses to raise import tariffs on Chinese Goods, what will be the impact on the US macroeconomic environment?


Distinguish between positive and normative statements