Increases in productivity due to changes in technological capacity could be best represented by:
A)Shift out in the demand curve.
B)Shift out in the supply curve.
C)Shift out in both the demand and supply curves.
D)Shift back in the supply curve.

Question

Quizplus · Accepted Answer

An increase in productivity due to technological advances will shift the supply curve to the right. This is because businesses will be able to produce more goods and services with the same amount of resources, resulting in a greater quantity supplied at any given price. A shift in the demand curve would indicate a change in consumer preferences or income levels. A shift in both the demand and supply curves would require additional information about changes in both consumption patterns and production capabilities. A shift back in the supply curve would imply a decrease in productivity, which is inconsistent with the information provided in the question.

Increases in Productivity Due to Changes in Technological Capacity Could