Improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve:
A)outward, such that more goods and services can be produced.
B)outward, such that the cost-of-living rises.
C)inward, such that the marketplace experiences a decrease in price and output levels.
D)inward, because more resources will be used up and not renewed.

Question

Improvements in and greater stocks of land, labor, capital, and entrepreneurial activity will shift the production possibilities curve:
A)​outward, such that more goods and services can be produced.
B)​outward, such that the cost-of-living rises.
C)​inward, such that the marketplace experiences a decrease in price and output levels.
D)​inward, because more resources will be used up and not renewed.

Quizplus · Accepted Answer

Improvements and greater stocks of land, labor, capital, and entrepreneurial activity increase the efficiency of resource allocation, which leads to an outward shift in the production possibilities curve. This means that more goods and services can be produced, indicating an expansion in the economy.

Improvements in and Greater Stocks of Land, Labor, Capital, and Entrepreneurial