Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 2 - Part I - Thinking Like an Economist - Problems and Applications - Page 36: 3

Answer

The quantity of the environment and the quantity of the industrial output determine two of the points on the frontier. The shape of the frontier is determined by how much industrial output must be given up for an incrementally better environment.

Work Step by Step

After development of a new way of producing electricity and emitting fewer pollutants is completed, the quality of the environment is increased. This would increase the shape of the frontier and push the frontier to the right.
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