📚 Learning Guide
Production Possibilities Curve Shifts
easy

What does a rightward shift in a production possibilities curve (PPC) typically indicate in terms of resource allocation?

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Choose the Best Answer

A

A decrease in available resources

B

An increase in efficiency in resource allocation

C

An increase in the production capacity of an economy

D

A change in consumer preferences

Understanding the Answer

Let's break down why this is correct

Answer

A rightward shift in a production possibilities curve (PPC) shows that an economy can produce more goods and services than before. This usually happens when there are improvements in resources, such as better technology, more workers, or increased raw materials. For example, if a country discovers new oil reserves, it can produce more energy, leading to a shift to the right on the PPC. This shift indicates that the economy is using its resources more efficiently or has more resources available. Overall, it means that the economy is growing and can provide more for its people.

Detailed Explanation

A rightward shift means the economy can produce more goods. Other options are incorrect because Some might think a right shift means fewer resources; People might confuse efficiency with capacity.

Key Concepts

scarcity
Topic

Production Possibilities Curve Shifts

Difficulty

easy level question

Cognitive Level

understand

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