Refer to the graphs. An increase in the economy's human capital would shift curve
A) AB to CD and curve Y to X.
B) CD to AB and curve X to Y.
C) X to Y, while leaving curve AB in place.
D) AB to CD and curve X to Y.

Question

Refer to the graphs. An increase in the economy's human capital would shift curve
A) AB to CD and curve Y to X. 
B) CD to AB and curve X to Y. 
C) X to Y, while leaving curve AB in place. 
D) AB to CD and curve X to Y.

Quizplus · Accepted Answer

An increase in the economy's human capital would lead to an outward shift of the production possibilities curve (PPC) AB to CD, indicating that the economy can produce more of both goods. This is because an increase in human capital results in a more skilled workforce that can produce goods more efficiently. Additionally, the shift from X to Y represents economic growth, as the economy is now able to produce more of both goods.

Refer to the Graphs