An outward shift of a nation's production possibilities frontier can occur due to
A)a reduction in unemployment.
B)a natural disaster like a hurricane or bad earthquake.
C)a change in the amounts of one good desired.
D)an increase in the labor force.

Question

Quizplus · Accepted Answer

An outward shift of a nation's production possibilities frontier occurs when the country is able to produce more of both goods. This can be achieved through an increase in the labor force, which will increase production efficiency and capacity. A reduction in unemployment, choice A, would not necessarily result in an outward shift of the production possibilities frontier as it only affects one factor of production. Natural disasters like hurricanes or earthquakes, choice B, can actually cause a contraction of the production possibilities frontier as production capacity is reduced. A change in the amounts of one good desired, choice C, would cause a movement along the production possibilities frontier, not an outward shift.

An Outward Shift of a Nation's Production Possibilities Frontier Can