Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
An increase in productive capacity and economic growth
B
A decrease in resources available for production
C
A reallocation of resources between the two goods
D
A permanent increase in the cost of production
Understanding the Answer
Let's break down why this is correct
Answer
An outward shift in the Production Possibilities Curve (PPC) indicates that an economy has increased its capacity to produce goods and services. This change can happen due to several factors, such as improvements in technology, an increase in the workforce, or better use of resources. For example, if a country develops a new farming technique that allows farmers to grow more crops on the same amount of land, the economy can produce more food than before. As a result, the PPC moves outward, showing that the country can now produce more of both food and other goods. This shift is a sign of economic growth and improvement in living standards for the population.
Detailed Explanation
An outward shift means the economy can produce more goods. Other options are incorrect because This option suggests that there are fewer resources; This option implies moving resources around without increasing them.
Key Concepts
Production Possibilities Curve
Economic Growth
Resource Allocation
Topic
Production Possibilities Curve Shifts
Difficulty
medium level question
Cognitive Level
understand
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