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"Suppose that a new pizza assembly line improves the pizza production process and that the development of the new assembly line does not require the use of more of society's resources.

Although the ability to produce wings has not changed, the new pizza making technology causes the production possibilities frontier to expand outward from $PPF_1$ to $PPF_2$.

It is now possible for society to produce more of both because the improvement in pizza making technology allows a redeployment of the labor force that also increases the production of wings."

My question:

I understand that improvement in pizza making technology will allow the same amount of workers to produce more. But why is it assumed that workers can be allocated to make more wings?

If for example, at point A, we produce 200 wings and 70 pizzas with 10 workers making wings and 10 workers making pizzas. Why at point B, do we produce 220 wings and 80 pizzas? I think it could be 200 wings and 80 pizzas because how do you know that its not still 10 workers making wings and 10 workers making pizzas (just more efficiently)?


1 Answer 1


Perhaps in order to produce 80 pizzas you don't need 10 workers but just 8 and the extra 2 workers can now produce wings.


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