If a country is producing efficiently and is on the production possibilities frontier,the only way to produce more of one good is with an advance in technology.

Question

Quizplus · Accepted Answer

If a country is producing efficiently on the production possibilities frontier, it means that all resources are already being utilized in the most optimal way to produce the maximum combination of goods and services. Therefore, to produce more of one good, the country must sacrifice the production of another good, moving away from the production possibilities frontier. An advance in technology can help the country produce more of both goods without sacrificing the production of either, allowing the production possibilities frontier to shift outward.

If a Country Is Producing Efficiently and Is on the Production