The diagram below shows two production possibilities boundaries for Country X. FIGURE 1-4
-Refer to Figure 1-4.An outward shift of the production possibilities boundary from to indicates which of the following?
A)an increase in the price of raw materials for consumer goods
B)growth in the country's productive capacity
C)an increase in the price of raw material for capital goods
D)more of the country's resources are being used
E)the country's resources are being used less efficiently

Question

The diagram below shows two production possibilities boundaries for Country X.  FIGURE 1-4
-Refer to Figure 1-4.An outward shift of the production possibilities boundary from  to  indicates which of the following?
A)an increase in the price of raw materials for consumer goods 
B)growth in the country's productive capacity 
C)an increase in the price of raw material for capital goods 
D)more of the country's resources are being used 
E)the country's resources are being used less efficiently

Quizplus · Accepted Answer

An outward shift of the production possibilities boundary indicates growth in the country's productive capacity, meaning that the country is able to produce more goods and services with its available resources. This could be a result of various factors such as technological advancements, an increase in labor productivity, or an increase in capital investment.

The Diagram Below Shows Two Production Possibilities Boundaries for Country