Asked by Gregory Bracco on Jul 21, 2024
Verified
The effect of an increase in productive inputs such as labor and capital can be shown by a(n) :
A) point inside of the production possibility frontier.
B) outward shift of the production possibility frontier.
C) movement from one point to another along the production possibility frontier.
D) inward shift of the production possibility frontier.
Productive Inputs
Resources used in the production of goods and services, including labor, capital, and raw materials.
Outward Shift
A movement of the supply or demand curve to the right, indicating an increase in supply or demand.
- Explore the factors responsible for the transformation of the production possibility frontier and the importance of these transformations.
- Explain the ramifications of technological development on the production possibilities boundary.
Verified Answer
TI
Tahmid IslamJul 22, 2024
Final Answer :
B
Explanation :
An increase in productive inputs such as labor and capital will result in an increase in the potential output of an economy. This will cause the production possibility frontier to shift outward, indicating that more goods and services can be produced than before. Points inside the production possibility frontier (A) represent inefficient use of resources, movements from one point to another along the frontier (C) represent trade-offs between the production of different goods, and an inward shift of the frontier (D) represents a decrease in the amount of inputs available for production.
Learning Objectives
- Explore the factors responsible for the transformation of the production possibility frontier and the importance of these transformations.
- Explain the ramifications of technological development on the production possibilities boundary.
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