ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, there may be a change in one of the factors that only affects the production of one good
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No, the PPC must move equally as resources used in production are the same for both goods in the PPC model
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Either A or B
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None of the above
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Detailed explanation-1: -What shifts the PPC inward or outward? Increases in the quantity or quality of resources will shift the PPC outward, making it possible to produce greater quantities of both goods. Increases in the quantity of resources include more land, labor, or capital.
Detailed explanation-2: -So if there is increase or decrease in the supply of the resources used for production, it is reflected in the amount of output. Therefore, the production possibility curve shifts to the right or to the left.
Detailed explanation-3: -The rightward shift of PPC indicates growth of resources or technological progress. Related Question & Answers.
Detailed explanation-4: -Ways of causing an outward shift of a country’s production possibility frontier: Investment in capital i.e. plant and machinery and new technology. Inward migration of younger, skilled workers. Discovery of new natural resources.