(Production Possibilities) There's no reason why a production possibilities frontier could not be used to represent the situation facing an individual. Imagine your own PPF. Right now-today-you have certain resources-your time, your skills, perhaps some capital. And you can produce various outputs. Suppose you can produce combinatioins ot two outputs, call them Studying and Partying.
a. Draw your PPF for studying and partying. Be sure to label the axes of the diagram appropriately. Label the points where the PPF intersects the axes, as well as several other points along the frontier.
b. Explain what it would mean for you to move upward and to the left along your personal PPF. What kinds of adjustments would you have to make in your life to make such a movement along the frontier?
c. Under what circumstances would your personal PPF shift outward? Do you think the shift would be a "Parallel" one? Why or Why not?
(Shifting Production Possibilities) Determine whether each of the following would cause the economy's PPF to shift inward, outward, or not at all:
a. An increase in average length of annual vacations
b. An increase in immigration
c. A decrease in the average retirement age
d. The migration of skilled workers to other countries