Which of the following factors given ceteris paribus causes the PPFC for an economy to shift to...

Question:

Which of the following factors given ceteris paribus causes the PPFC for an economy to shift to the right?

a) Lack of technology

b) Lack of physical capital

c) High death rates

d) None of the above

Production Possibility Curve:

Production possibility curve shows the various combination of the two bundles of goods than an economic unit is capable of producing with the given factor inputs and technology. An increase in the productive capacity would lead to the rightward shift of the curve and a fall would lead to a leftward shift.

Answer and Explanation: 1

The correct option is:

d) None of the above

The production possibility curve shifts to the rightward when there is an increase in the productive capacity of the economy. In the given question none of the factors would lead to an increase in the production level rather than lower it.


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Production Possibilities Curve: Definition & Examples

from

Chapter 11 / Lesson 28
878

Understand what the production possibilities curve is, and learn how to construct and interpret a production possibilities curve along with the example.


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