Question

In an effort to compete with foreign markets, suppose production facilities across the nation operating at full employment, added a night shift to their production schedules for the first time. Which of the following is true?

a. Economic growth will increase if these are new resources.
b. Production will increase.
c. There will be a movement along the production possibilities curve in the direction of consumer goods.

a. I only.
b. II only.
c. III only.
d. I and II only.
e. I, II, and III.

Answer 1

d. I and II only.

Step-by-step explanation:

If a night shift is added, then total production output should increase (that is the whole idea of adding that extra hours of production time).

Economic growth will increase because even though capital is the same (the same factory), other production factors will be new, e.g. labor and land (materials).

The production possibilities frontier should shift outward, i.e. it should expand. The shift will not happen along the existing curve.