Suppose an economy produces two goods,food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 50 units of food and 30 machines.This year,it is producing 55 units of food and 33 machines.Which of the following events could not explain the increase in output?

Question

Quizplus · Accepted Answer

A reduction in unemployment or an increase in available labor could increase the economy's output because it would mean more labor resources are available to produce goods. An improvement in technology could also increase output by increasing the efficiency of production processes. Therefore, any of these events could explain the increase in output except for a reduction in unemployment, which would not necessarily result in an increase in output without a corresponding increase in available labor.

Suppose an Economy Produces Two Goods,food and Machines