An increase in capacity utilization is reflected in:
A) an outward shift of the production possibility frontier.
B) a movement down and along the production possibility frontier.
C) a movement up and along the production possibility frontier.
D) a movement from inside the production possibility frontier toward the frontier.

Question

Quizplus · Accepted Answer

An increase in capacity utilization means that an economy is making better use of its existing resources, moving from a point inside the production possibility frontier (PPF) closer to the frontier itself, indicating more efficient production without necessarily changing the maximum possible output.

An Increase in Capacity Utilization Is Reflected In