Refer to the information provided in Figure 2.6 below to answer the questions that follow. Figure 2.6
-Refer to Figure 2.6. Which of the following will NOT cause the production possibility frontier to shift from ppf1 to ppf2?
A) the discovery of previously unknown oil fields
B) an improvement in technology
C) an increase in the stock of capital
D) a decrease in the unemployment rate

Question

Refer to the information provided in Figure 2.6 below to answer the questions that follow.  Figure 2.6
-Refer to Figure 2.6. Which of the following will NOT cause the production possibility frontier to shift from ppf1 to ppf2?
A) the discovery of previously unknown oil fields 
B) an improvement in technology 
C) an increase in the stock of capital 
D) a decrease in the unemployment rate

Quizplus · Accepted Answer

A decrease in the unemployment rate is not likely to cause a shift in the production possibility frontier from ppf1 to ppf2. The production possibility frontier represents the maximum levels of output that can be produced with a given set of resources and technology. A decrease in the unemployment rate may improve the efficiency of resource use but it is unlikely to result in a significant increase in the available resources or technology. On the other hand, the discovery of previously unknown oil fields, an improvement in technology, and an increase in the stock of capital can increase the availability of resources and technology and thus shift the production possibility frontier outward from ppf1 to ppf2.

Refer to the Information Provided in Figure 2