Multiple Choice
Which of the following scenarios would cause the Production Possibilities Curve (PPC) to shift outward?
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2. Introductory Economic Models
Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency
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Which of the following will NOT produce an outward shift of the production possibilities frontier (PPF)?
A
A decrease in available resources
B
Discovery of new natural resources
C
An increase in the labor force
D
An improvement in technology
Verified step by step guidance1
Understand that the Production Possibilities Frontier (PPF) represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.
Recall that an outward shift of the PPF indicates economic growth, meaning the economy can produce more of both goods than before.
Identify factors that cause an outward shift: these include an increase in available resources (like labor or capital), discovery of new natural resources, and technological improvements that make production more efficient.
Recognize that a decrease in available resources reduces the economy's capacity to produce goods and services, which would cause the PPF to shift inward, not outward.
Conclude that among the options given, a decrease in available resources will NOT produce an outward shift of the PPF.
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