A production possibilities frontier will shift outward FOR ALL OF THE FOLLOWING REASONS EXCEPT
A)a technological improvement.
B)an increase in the stock of capital.
C)an increase in the labour force.
D)opportunity cost is increasing.
E)none of the above.

Question

Quizplus · Accepted Answer

The production possibilities frontier will shift outward due to improvements in technology, an increase in the stock of capital, or an increase in the labour force. However, if opportunity cost is increasing, it means that more and more resources are required to produce additional units of one good, causing the production of the other good to decrease. This can result in a movement along the production possibilities frontier, but not a shift outward. Therefore, option D is the correct answer as it does not cause an outward shift of the production possibilities frontier.

A Production Possibilities Frontier Will Shift Outward FOR ALL OF THE FOLLOWING