All the following conditions will cause an outward shift of the production possibilities frontier except:
A) an improvement in the overall technology of production.
B) existing factors of production become more productive.
C) the quantity of the factors of production increases.
D) previously unemployed factors of production are put back to work.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) represents the maximum output combinations of goods or services an economy can achieve when all resources are fully and efficiently employed. An outward shift in the PPF indicates an increase in an economy's capacity to produce. Choices A, B, and C all directly contribute to an increase in production capacity either through technological advancements, increased productivity, or an increase in resources, thus shifting the PPF outward. Choice D, putting previously unemployed factors of production back to work, does not shift the PPF outward but rather moves the economy closer to the existing frontier, indicating better utilization of existing resources rather than an increase in production capacity.

All the Following Conditions Will Cause an Outward Shift of the Production