PPF in this case will have the standard appearance: it will be downward sloping.

11. For the second hypothesis, a well-funded social safety net might make people feel that even if their

company goes bankrupt or they need to change jobs or industries, they will have some degree of

protection. As a result, people may be more willing to allow markets to work without interference, and not

to lobby as hard for rules that would prevent layoffs, set price controls, or block foreign trade. In this case,

safety net programs that increase equality could also allow the market to work more freely in a way that

could increase output. In this case, at least some portion of the PPF between equality and economic output

would slope up.

12. Pure redistribution is more likely to cause a sharp tradeoff between economic output and equality than

policies aimed at the ladder of opportunity. A production possibility frontier showing a strict tradeoff
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