Exhibit 2-11 Production possibilities curves
-In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Question

Exhibit 2-11 Production possibilities curves 
-In Exhibit 2-11, which of the following could have caused the production possibilities curve of an economy to shift from the one labeled A to the one labeled B?

Quizplus · Accepted Answer

The production possibilities curve shifting from A to B represents an increase in the production capacity of the economy. This could occur due to an advance in technology, which allows for increased efficiency and productivity. A major natural disaster, an increase in unemployment, or a decrease in consumption goods production would typically result in a shift inward of the production possibilities curve, indicating a decrease in production capacity. An increase in consumption goods production would shift the curve along the same line, but not necessarily increase production capacity.

Exhibit 2-11 Production Possibilities Curves