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Chapter 2: Q 14 (page 46)

Like physical capital, human capital produced in the present can be applied to the production of future goods and services. Consider the table in Problem 2-13, and suppose that the nation鈥檚 residents are trying to choose between combination C and combination F. Other things being equal, will the future production possibilities curve for this nation be located farther outward if the nation chooses combination F instead of combination C? Explain.

Short Answer

Expert verified

No, the production possibilities curve for the nation will not be located farther outward if the nation chooses combination F instead of combination C.

Step by step solution

01

Step 1. Given Information.

The data for the units of consumer goods and units of human capital is as follows:

Production CombinationsUnits of Consumption GoodsUnits of Human Capital
A0100
B1097
C2090
D3075
E4055
F5030
G600
02

Step 2. Reason.

No, the production possibilities curve for the nation will not be located farther outward if the nation chooses combination F instead of combination C. The combination C produces 90 units of human capital which are farther to the right than combination F which produces 30 units of human capital.

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