Improvements in the methods of production allow for the creation of:

• A. an outward shift of the production possibilities frontier
• B. a movement from a point inside the PPF to a point on the PPF
• C. a reduction in the attainable combinations of goods and services
• D. a decrease in opportunity cost for all goods

Answer: (A)

Verified step by step guidance

1. Understand what the Production Possibilities Frontier (PPF) represents: it shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.
2. Recognize that improvements in production methods mean that the economy can produce more output with the same amount of resources, effectively increasing productive capacity.
3. Recall that an increase in productive capacity is represented graphically by an outward shift of the PPF, indicating that more of both goods can be produced than before.
4. Distinguish this from a movement from a point inside the PPF to a point on the PPF, which represents better resource utilization but not a change in production capacity itself.
5. Note that improvements in production methods do not reduce the attainable combinations or necessarily decrease opportunity costs for all goods; rather, they expand the frontier, allowing for greater production possibilities.