The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4 -Refer to Figure 1-4.A shift of the production possibilities boundary from PPB₁ to PPB₂ implies A)a movement from full employment to some unemployment. B)that if point E is the new choice of outputs,productivity has increased in the consumer goods industry. C)that technology in the capital goods industries has improved. D)an inevitable decrease in total output. E)that technology in the consumer goods industry has improved.

Question

Quizplus · Accepted Answer

A shift of the production possibilities boundary outward from PPB1 to PPB2 indicates an improvement in technology or an increase in resources, allowing for more production of both goods. In this case, it suggests that technology in the capital goods industries has improved, enabling more efficient production.

The Diagram Below Shows Two Production Possibilities Boundaries for Country