In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by
A) a movement along the frontier.
B) the production possibility frontier shifting outward, away from the origin.
C) a movement from a point inside the frontier to a point on it.
D) a movement toward the origin.

Question

Quizplus · Accepted Answer

An increase in productivity due to new technology allows an economy to produce more goods and services with the same amount of resources, effectively expanding its capacity. This is best represented by the production possibility frontier (PPF) shifting outward, away from the origin, indicating that the economy can now produce more of both goods than before.

In Terms of the Production Possibility Frontier, an Increase in Productivity