Question
If technology improves in the production of just one good, then the curve will pivot. What does that mean?
Answers
GPT-4o mini
In economics, when we refer to a production possibilities frontier (PPF), the curve represents the maximum possible output combinations of two goods that can be produced given available resources and technology.
When we say that "the curve will pivot" if technology improves in the production of just one good, it means that the PPF will change its shape in a way that reflects increased efficiency or productivity in the production of that specific good, while the production capacity of the other good remains the same.
Here's what this entails:
1. **Improvement in Technology**: An advancement in technology for producing one good (let's say Good A) means that more of Good A can be produced with the same amount of resources.
2. **Pivoting of the Curve**: The PPF will pivot outward at the axis of Good A. This shows that the country can now produce more of Good A without sacrificing the production of Good B. The point on the PPF where it pivots will not change for Good B, thus reflecting the idea that the resources and technology for Good B have not changed.
3. **Visual Representation**: Graphically, if you imagine the PPF as a bowed-out curve, the curve would stay the same on one end (the end representing Good B) and extend outward on the other end (the end representing Good A). This illustrates that the opportunity to produce more of Good A increases due to the technological improvement.
In summary, a pivoting PPF indicates an improvement in production efficiency for one good, resulting in more output of that good without reducing the output of the other good as previously possible.
When we say that "the curve will pivot" if technology improves in the production of just one good, it means that the PPF will change its shape in a way that reflects increased efficiency or productivity in the production of that specific good, while the production capacity of the other good remains the same.
Here's what this entails:
1. **Improvement in Technology**: An advancement in technology for producing one good (let's say Good A) means that more of Good A can be produced with the same amount of resources.
2. **Pivoting of the Curve**: The PPF will pivot outward at the axis of Good A. This shows that the country can now produce more of Good A without sacrificing the production of Good B. The point on the PPF where it pivots will not change for Good B, thus reflecting the idea that the resources and technology for Good B have not changed.
3. **Visual Representation**: Graphically, if you imagine the PPF as a bowed-out curve, the curve would stay the same on one end (the end representing Good B) and extend outward on the other end (the end representing Good A). This illustrates that the opportunity to produce more of Good A increases due to the technological improvement.
In summary, a pivoting PPF indicates an improvement in production efficiency for one good, resulting in more output of that good without reducing the output of the other good as previously possible.