ECONOMICS
PRODUCTIVE RESOURCES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in the labor force
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a decrease in the price of cotton
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a decrease in the demand for t-shirts
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an increase in the prices of both goods
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Detailed explanation-1: -Answer. The production possibilities curve for this economy will shift outward when there will be an increase in the labor force as the labors are the inputs in the production of cotton t-shirts and metal stop signs.
Detailed explanation-2: -If a certain combination of goods and services lies inside the production possibilities curve for an economy, that combination is an inefficient use of resources. Points along the production possibilities curve represent combinations of goods and services where resources are being used efficiently.
Detailed explanation-3: -Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized.