Suppose an economy produces two goods,food and machines.This economy always operates on its production possibilities frontier.Last year,it produced 1000 units of food and 47 machines.This year,it is producing 1050 units of food and 52 machines.Which of the following events could not explain the increase in output?

Question

Quizplus · Accepted Answer

A reduction in unemployment or an increase in available labor both lead to an increase in the economy's available resources, which can be used to produce more goods. An improvement in technology allows for more efficient production, increasing output with the same amount of resources. However, none of these can explain an increase in output without a corresponding increase in available resources, such as labor or capital. Therefore, A is the correct answer as a reduction in unemployment would not directly increase available resources.

Suppose an Economy Produces Two Goods,food and Machines