An increase in the technology used in the production of only one of the two goods in a society will
A) eliminate scarcity
B) move the production possibilities frontier out in all directions
C) move the production possibilities frontier in all directions
D) leave one corner of the production possibilities frontier fixed and swing out from the other

Question

Quizplus · Accepted Answer

An increase in technology for only one good would affect the production of that good, causing an outward shift in the production possibilities frontier (PPF) for that good, leaving one corner of the PPF fixed while swinging out from the other corner. This means that there would be a higher quantity of the good produced with the new technology and possibly a decrease in the opportunity cost of producing the other good. However, scarcity would not be eliminated as there are still limited resources available for production. The PPF would not move in all directions nor increase in all directions.

An Increase in the Technology Used in the Production of Only