An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF)would cause an
A) inward shift of the PPF.
B) outward shift of the PPF.
C) outward rotation along the x axis.
D) outward rotation along the y axis.
E) increase in opportunity cost.

Question

Quizplus · Accepted Answer

An increase in general resources would cause an outward shift of the PPF because with more resources, more goods can be produced efficiently. An inward shift of the PPF would occur if there were a decrease in resources, and an increase in opportunity cost would occur if there were a trade-off between producing one good over another. Outward rotations along the x or y axis do not make sense in the context of a PPF.

An Increase in General Resources That Affects the Production of Both