Consider Canada's production possibilities boundary.Suppose a scientific breakthrough leads to a lower- cost method of producing battery- operated cars in Canada.The likely effect would be to move Canada's current production
A)to a point inside its new production possibilities boundary.
B)above the level of U.S.production.
C)to a point beyond its new production possibilities boundary.
D)possibilities boundary outward.
E)possibilities boundary inward.

Question

Quizplus · Accepted Answer

The scientific breakthrough leading to a lower-cost method of producing battery-operated cars will increase Canada's efficiency in production and increase the potential output. This will result in a shift in Canada's production possibilities boundary outward. This means that Canada can now produce more goods and services than before the breakthrough, including battery-operated cars, without requiring additional resources or an increase in technology. Therefore, Canada's production possibilities boundary will shift outward.

Consider Canada's Production Possibilities Boundary