Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

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

Answer

The shape and position of the production possibilities curve (PPC) comparing industrial output and cleanness of the environment is given this shape because these two things are trade-offs of one another. A country can produce a large number of goods , However, it leads to very polluted environment, conversely, a country may choose to have a very clean environment but low production. In case, if any new technology is developed that allows for electricity to be produced more cleanly the production possibility frontier will expand, allowing for a cleaner environment at higher levels of output, as shown by curve 2.

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