📚 Learning Guide
Production Possibilities Curve Shifts
easy

If the Production Possibilities Curve (PPC) shifts outward, what is the most likely underlying cause of this change?

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Choose the Best Answer

A

An increase in technology and resource availability

B

A decrease in consumer demand for goods

C

A temporary reduction in labor force

D

A decline in production efficiency

Understanding the Answer

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Answer

When the Production Possibilities Curve (PPC) shifts outward, it usually means that an economy can produce more goods and services than before. This shift often happens due to improvements in resources or technology. For example, if a country discovers new ways to grow crops more efficiently, it can produce more food without using more land. Additionally, an increase in the workforce or better education can also lead to more production capacity. Overall, an outward shift shows that the economy has grown and can offer more to its people.

Detailed Explanation

When technology improves or more resources are available, production can increase. Other options are incorrect because Some might think less demand means less production; People may think fewer workers means less production.

Key Concepts

Production Possibilities Curve
Economic Growth
Resource Allocation
Topic

Production Possibilities Curve Shifts

Difficulty

easy level question

Cognitive Level

understand

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