Which of the following would lead to an outward shift of the production possibilities curve?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

An outward shift of the production possibilities curve (PPC) signifies an increase in an economy's capacity to produce goods and services. This shift typically occurs due to an enhancement in the factors of production, such as labor, capital, or technology.

An increase in skilled workers boosts the productivity of the labor force. Skilled workers are able to use resources more efficiently, innovate, and adapt to new technologies, which collectively lead to higher output levels. As the workforce becomes more skilled, the economy can produce more of both goods represented on the PPC, causing it to shift outward.

This understanding of how skilled labor impacts production capabilities is essential. In contrast, a decrease in skilled workers would hinder productivity, while reductions in available resources or a decline in technology would impair the economy's ability to produce, resulting in a potential inward shift of the PPC. Thus, the addition of skilled workers directly contributes to economic growth and efficiency.

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