Multiple Choice
The country of Clutchtopia has just stumbled upon a new technology as shown on the graph.
If Clutchtopians demand 3 million pizza bagels, what is the productively efficient increase in robot production?
2. Introductory Economic Models
PPF - Outward Shifts
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
An outward shift of a nation's production possibilities frontier (PPF) can occur due to:
A
an increase in available resources
B
a decrease in technology
C
a reduction in labor force
D
a decrease in capital stock
Verified step by step guidance1
Understand that the Production Possibilities Frontier (PPF) represents the maximum combinations of two goods or services that an economy can produce given its resources and technology.
Recognize that an outward shift of the PPF means the economy can produce more of both goods than before, indicating economic growth or an increase in productive capacity.
Identify the factors that can cause the PPF to shift outward: an increase in available resources (such as labor, capital, or natural resources) or improvements in technology.
Evaluate each option: a decrease in technology, reduction in labor force, or decrease in capital stock would reduce productive capacity and shift the PPF inward, not outward.
Conclude that the only option that causes an outward shift of the PPF is an increase in available resources.
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