1. How would each of the following affect the British production possibility curve, and/or the country's position in/on it? (i) An increase in immigration An increase in immigration will mean that there will be an increase in the number of people who will require food and clothing. However there is a limit to the amount of production that can be achieved. The government can either increase the amount of food produced and decrease the amount of clothing, or it can increase the amount of clothing produced and decrease the amount of food.
British Production Possibility Curves Increase in food produced Increase in clothing produced (ii) A major war Typical of most wars is the loss of labour. This means that there is a decrease in a factor of production, which would force the production possibility curve to shift left. This would mean that there would be a decrease in the maximum limit of food and clothing that can be produced.
English: Diagram illustrating the "aggregate suppl...
XFIG-generated-supply-demand
Demand curveProduction Possibility Curve A decrease in unemployment Assuming that a decrease in unemployment is a result of unemployed people finding work; A decrease in unemployment would mean that there is an increase in labour and would also mean that the economy is becoming more efficient. This would mean an increase in the maximum level of production for food and clothing due to an increase in a factor of production. On a possibility curve this would mean a shift to the right.
British Production Possibility Curve (iii) Discovery of new oilfield The discovery of a new oilfield would mean an increase in raw materials available in the factors of production. This would mean that the maximum level of production of food and clothing would increase. On the production possibility curve, this would mean a shift to the right.
British Production Possibility...