The production possibilities frontier shifts outward when

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) represents the maximum combinations of goods an economy can produce, given its resources and technology. When human capital accumulates, the skills, knowledge, and capacities of workers improve, allowing them to produce more output with the same resources or to produce the same output with fewer resources. This leads to a shift of the PPF outward, as the economy can now produce more goods and services than before. Choices A, B, and E are irrelevant or incorrect, as they don't affect the economy's productive capacity, but rather the way it allocates or measures its resources. Choice C is also incorrect, as a rise in prices would not necessarily change the PPF, but rather its slope or position along the axes.

The Production Possibilities Frontier Shifts Outward When