The correct reason for the shift of the
Answer to Problem 1MCQ
Option a is correct.
Explanation of Solution
Explanation for the correct option:
a.
Technology changes can shift the production possibility outward because that would increase the output level of the overall production of goods and services.
Explanation for incorrect options:
b.
An increase in the production of consumer goods can decrease the production of other alternative types of goods produced using similar resources but would not shift the possibility curve outward.
c.
A decrease in labor resources would require using the labor resources for limited production. This would also not shift the PPC outward.
d.
Depreciation of capital will affect production due to a reduction in its efficiency for being long −term usage. For instance, a machine is
e.
Since only one option is correct. Therefore, option e is incorrect.
Production possibility curve (PPC): PPC shows the graphical representation of a different combination of goods that can be produced by using the available factor of production.
Chapter 40 Solutions
Krugman's Economics For The Ap® Course
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