ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increasing production
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decreasing production
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Either A or B
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None of the above
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Detailed explanation-1: -If the production possibility frontier shifts to the right, this would show economic growth.
Detailed explanation-2: -If the production possibility frontier shifts to the right, this would show economic growth. Where there is an advancement of technology or increase in availability of resources or introduction of a production method with improved efficiency in respect to both the goods, then PPF will shift to the right, i.e. outwards.
Detailed explanation-3: -Outward or inward shifts in the PPF can be driven by changes in the total amount of available production factors or by advancements in technology. If the total amount of production factors like labor or capital increases, then the economy is able to produce more goods at any point along the frontier.
Detailed explanation-4: -So if there is increase in the availability of the resources in the economy then automatically the overall output in the economy increases which shifts the PPC to the right.
Detailed explanation-5: -When using a PPF, growth is defined as an increase in potential output over time, and illustrated by an outward shift in the curve. An outward shift of a PPF means that an economy has increased its capacity to produce all goods.