Which of the following will shift the production possibilities curve outward?

Question

Quizplus · Accepted Answer

An increase in the stock of capital due to the sacrifice of current consumption will lead to an outward shift of the production possibilities curve. This is because more capital can be used to produce more goods and services in the future, increasing potential output. Choices A and D would not shift the curve outward, and choice B is ambiguous as a decrease in market price could indicate a decrease in demand and therefore a shift inward of the curve.

Which of the Following Will Shift the Production Possibilities Curve