Question

score: 200 show the effect of a decrease in the high school dropout rate in this economy.

Explanation:

Step1: Analyze the Production Possibility Curve (PPC)

The graph shows a PPC with Wheat on the y - axis and Smart Phones on the x - axis. A decrease in the high - school dropout rate means that the quality of the labor force improves (more skilled workers). This is an improvement in the economy's resources (human capital).

Step2: Determine the Shift of the PPC

An improvement in human capital (due to lower dropout rate, more educated workers) will increase the economy's productive capacity. So, the production possibility curve will shift outward (to the right). This is because with a more skilled labor force, the economy can produce more of both goods (Wheat and Smart Phones) or a combination that was previously unattainable.

Answer:

The production possibility curve (PPC) will shift outward (to the right). This is because a decrease in the high - school dropout rate improves the quality of the labor force (human capital), which increases the economy's productive capacity, allowing for more production of both Wheat and Smart Phones (or a better combination of the two goods). To show this effect, we would draw a new PPC that is outside (to the right) of the original PPC.