Describe how each of the following would affect the U.S. production possibilities frontier: (a) an increase in the number of illegal immigrants entering the country, (b) a war that takes place on U.S. soil, (c) the discovery of a new oil field, (d) a decrease in the unemployment rate, and (e) a law that requires individuals to enter lines of work for which they are not suited.
a) An increase in the number of illegal immigrants entering the country would cause an outward shift in the PPF because would be more cheap labor available so production would increase.
b) A war on U. S. soil would cause the PPF to shift inward becuase plant and equipment would either be used for war efforts or destroyed and people would be drafted or killed. Both would decrease production.
c) The discovery of a new oil field would cause the PPF to shift outward due to the increase in resources.
d) A decrease in the unemployment rate will not change the PPF itself because actual production in the country was below the PPF when the unemployment rate was high. The decrease in unemployment will expand actual production back to a level on the PPF efficiently using all resources.
e) A law requiring people to go into fields they are not suited for would cause the production level to underutilize resources or be located at a level beneat the PPF because people's skills are being misapplied and underutilized.