Question

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an:
a: inward shift of the PPF.
b: outward shift of the PPF.c: outward rotation along the x axis.
d: outward rotation along the y axis.
e: increase in opportunity cost.

Answer 1

Answer:

B) outward shift of the PPF.

Explanation:

The production possibilities frontier (PPF) refers to the different combinations of production output for two different goods that can be produced given a fixed amount of available resources (e.g. machinery, materials, labor).

If there is an increase in the availability of resources (e.g. more materials are available or more machines are used), then more goods can be produced. Therefore the PPF curve should shift outwards since total output will increase.