Consider a production possibilities boundary showing the quantity of military goods and the quantity of civilian goods on the two axes.A movement along the production possibilities boundary could be caused by
A)the employment of previously idle resources.
B)the reallocation of resources between military and civilian goods.
C)the growth of productive capacity.
D)an increase in the labour supply.
E)technological progress.

Question

Quizplus · Accepted Answer

A movement along the production possibilities boundary can only be caused by the reallocation of resources between military and civilian goods. The production possibilities boundary shows the maximum possible combination of military and civilian goods that can be produced given the current resources and technology. Any movement along the boundary represents a trade-off between military and civilian goods, as producing more of one requires producing less of the other. The other options listed (A, C, D, E) would shift the entire production possibilities boundary outward or inward, representing an increase or decrease in the total amount of goods that can be produced.

Consider a Production Possibilities Boundary Showing the Quantity of Military