What causes an economy to produce more of Good X and no less of Good Y...
Technology is the advancement of the society as a whole. Better technology means that you can figure out more efficient production techniques thereby leading the economy to create a scope to move the PPC further to the right.
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What causes an economy to produce more of Good X and no less of Good Y...
Explanation:
The correct answer is option A: Technology to produce Good X improves.
Technology and Production Efficiency:
Improvements in technology can lead to an increase in the production of Good X and no less of Good Y. Technological advancements can enhance the efficiency of production processes, reduce costs, and increase productivity. This can result in an economy producing more of Good X while maintaining the same level of production for Good Y.
Benefits of Technological Improvements:
There are several reasons why technology improvements can lead to an increase in the production of Good X and no less of Good Y:
1. Enhanced Productivity: Technological advancements enable firms to produce more output with the same amount of resources or inputs. This increased productivity allows for the production of more Good X without sacrificing the production of Good Y.
2. Cost Reduction: Improved technology often leads to cost reductions in the production process. This can be achieved through the introduction of more efficient machinery, automation, or streamlined processes. As a result, the cost of producing Good X decreases, making it more profitable to produce more of it.
3. Resource Optimization: Technological advancements can help in optimizing the use of resources. By utilizing resources more efficiently, an economy can produce more of Good X without reducing the production of Good Y.
4. Increased Demand: Technological improvements can also lead to an increase in demand for Good X. For example, if the improved technology results in a higher quality or more desirable product, consumers may be willing to purchase more of it. This increased demand can drive firms to produce more of Good X.
5. Economies of Scale: Technological advancements often enable firms to achieve economies of scale, which means that as production levels increase, the average cost of production decreases. This allows firms to produce more of Good X without increasing costs significantly.
Conclusion:
Overall, improvements in technology can have a significant impact on an economy's production capabilities. By enhancing productivity, reducing costs, optimizing resources, and increasing demand, technology can lead to an increase in the production of Good X and no less of Good Y.
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