Explain the impact, if any, of each of the following on the ...

[bobbysung]

Explain the impact, if any, of each of the following on the production possibilities curve:
 
  a. Europe's population fell by 30 to 60 percent following an outbreak of bubonic plague, also known as Black Death, in the fourteenth century.
  b. In the next 20 years, a sizeable proportion of the United States labor force is expected to include many people who are above the age of 65 .
  c. Canada recently discovered large reserves of shale gas (shale gas is natural gas that is trapped in fine-grained sedimentary rock).

Question 2

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market.
 
  A) below; below B) below; above C) above; below D) above; above

[mbcrismon]

Answer to Question 1

a, A fall in the population would reduce the availability of labor in the economy. With a fall in the number of workers, the production possibilities curve will shift inward.
b. An increase in the number of people who are older than 65 years would mean that there are fewer people in the economy who are available and willing to work. This would imply an inward shift of the production possibilities curve.
c. With the discovery of shale gas reserves, Canada's stock of natural resources increases. The production possibilities curve will shift outwards.

Answer to Question 2

C

[bobbysung]

Correct answers!

[mbcrismon]

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