If the U.S. government decides to allow physicians trained in other countries to get legal employment...

If the U.S. government decides to allow physicians trained in other countries to get legal employment only in the healthcare sector in the United States, show its effect on the U.S. economy using a production possibilities graph.

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Expert Solution

production possibilities frontier (PPF).

There are more similarities than differences between individual choice and social choice.

Because society has limited resources (e.g., labor, land, capital, raw materials) at any point in time, there is a limit to the quantities of goods and services it can produce. Suppose a society desires two products, healthcare employment and education.

A employment vs. Education Production Possibilities Frontier. This production possibilities frontier shows a tradeoff between devoting social resources to healthcare and devoting them to education. At A all resources go to healthcare and at B, most go to healthcare. At D most resources go to education, and at e, all go to education.

employment is shown on the vertical axis and education is shown on the horizontal axis. If the society were to allocate all of its resources to employment, it could produce at point A. But it would not have any resources to produce education. If it were to allocate all of its resources to education, it could produce at point d. Alternatively, the society could choose to produce any combination of employment and education shown on the production possibilities frontier. In effect, the production possibilities frontier plays the same role for society as the budget constraint plays for Alphonso. Society can choose any combination of the two goods on or inside the PPF. But it does not have enough resources to produce outside the PPF.

Rahul Sunny answered 1 year ago

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