Among the primary sources of long-run economic growth, an enhancement in production technologies is unquestionably influential.
Displayed below is the expansion of the production-possibility curve (from PPC1 to PPC2) illustrating the shift towards balanced development.
The expansion of the production-possibility curve, from PPC1 to PPC2, could possibly be attributed to various factors such as a fall in the average cost of producing material or an increase in the national amount of usable land.
One of the true statements is that enhancements in the technology used in production can lead to increases in current output levels but may not necessarily be a direct source of long-term economic growth.
In a scenario where a country produces wine and weapons exclusively, a change in the relative value of weapons in the global market is least likely to lead to biased development.
The Rybczynski theorem highlights that an increase in the endowment of one factor of production while keeping the other factor unchanged will result in a relative increase in the output of the good utilizing the expanding factor intensively.
According to the Rybczynski theorem, an increase in a capital-abundant nation’s endowment of capital will cause the output of medical instruments to rise and the output of corn to fall, with the relative prices of the products remaining unchanged.
Considering a capital-abundant nation trading medical instruments and corn, an increase in the nation’s capital endowment will lead to a rise in the price of medical instruments relative to corn.
Take a look at these related study banks: Anatomy Physiology Related Study Banks
There are no reviews yet.