Use the following figure to answer the questions: Figure 1.5

-if an economy is currently producing on PP2,which of the following would shift the production possibilities curve toward PP1?
A)An increase in the quantity of labor available.
B)A decrease in the amount of capital available.
C)An increase in the level of unemployment above the normal level.
D)An advancement in technology.

Question

Use the following figure to answer the questions: Figure 1.5

-if an economy is currently producing on PP2,which of the following would shift the production possibilities curve toward PP1?
A)An increase in the quantity of labor available. 
B)A decrease in the amount of capital available. 
C)An increase in the level of unemployment above the normal level. 
D)An advancement in technology.

Quizplus · Accepted Answer

A decrease in the amount of capital available would shift the production possibilities curve leftward, toward PP1, indicating a lower level of potential output. This is because capital is one of the factors of production, and a decrease in its availability would limit the economy's ability to produce goods and services. The other options would have different effects: an increase in the quantity of labor available might shift the curve outward, a higher level of unemployment would likely mean the economy is currently producing below its potential, and an advancement in technology could shift the curve outward toward PP3.

Use the Following Figure to Answer the Questions: Figure 1