Problem:

Draw the bowed-out production possibilities curve (PPC or PPF) with the aggregate measure of medical services, Q, on horizontal axis and the aggregate measure of all other goods (and services), Z, on vertical axis. Discuss and illustrate the implications of following changes on quantities of medical services and all other goods:

a. A movement down along the curve.

b. A movement from the interior of curve to a north-easterly point on curve.

c. An increase in quantity of labour in economy.

d. A technological discovery which raises the production of Z.

e. If it were your choice, where would you select to produce on PPC and why?