Question

Which of the following would cause an outward shift of the production possibilities frontier?

a. An increase in opportunity costs
b. A reduction in the size of the labor force
c. A reduction in inefficiency
d. A change in the combination of goods produced
e. An improvement in technology

Answer 1

e. An improvement in technology

Step-by-step explanation:

The production possibilities frontier shows the various combinations of two goods an economy can produce given an amount of resources.

A change in the combination of goods produced and an increase in opportunity costs leads to a movement along the curve.

A reduction in the size of the labor force causes the production possibility frontier to shift inward.

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