The production possibility frontier can shift out as a result of all of these EXCEPT an:
A) increase in land.
B) increase in labor.
C) increase in capacity utilization.
D) improvement in technology.

Question

Quizplus · Accepted Answer

The production possibility frontier (PPF) represents the maximum output combinations of goods or services an economy can achieve when all resources are fully and efficiently utilized. Shifts in the PPF are typically due to changes in the factors of production (land, labor, capital) or improvements in technology, which enhance an economy's efficiency and its ability to produce more goods and services. An increase in capacity utilization refers to using existing resources more fully, rather than expanding the economy's resources or improving technology, and thus does not shift the PPF outwards but moves the economy closer to the existing frontier.

The Production Possibility Frontier Can Shift Out as a Result