North Korea’s isolation has forced it to create its own capital goods. North Korea is also a nation which has a mountainous terrain and relatively few natural resources. What effect has this MOST LIKELY had on North Korea’s economy?
A
North Korea has developed a very efficient economy.
B
North Korea has low-quality capital goods which produce low-quality general goods.
C
North Korea specializes in industrial production but cannot adequately feed its people.
D
North Korea produces high-quality capital goods and produces general goods for its few trading partners.

levels of production can be increased by technology while holding labor and capital constant, because increased technology makes the production process more efficient. subsequently, the lras curve is almost a vertical line, that can shift to the right, with an increase in technology.

the relationship between the lras curve and the ppc is that both can make the economy could grow. the ppc achieves that when it shifts outward because of more resources or technological advances while the lras curve shifts if more resources are developed or if there are technological advances.

the lras curve is a vertical line at an output level that represents the number of goods and services a nation can produce over a sustained period using all of its productive resources as efficiently as possible with all of the current technology available to it.

the production possibilities frontier (ppf) is a graphical device that is used for economic analysis of production decisions because the ppf measures the maximum possible combinations of two goods that an economy is capable of producing with its currently available resources and technology.

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