An improvement in technology or an increase in the amount of capital goods will
A) result in movement along a fixed production possibilities curve.
B) diminish the society's production potential.
C) increase the opportunity costs of all goods.
D) cause the production possibilities curve to become vertical.
E) shift the production possibilities curve outward.

Question

Quizplus · Accepted Answer

An improvement in technology or an increase in the amount of capital goods will shift the production possibilities curve outward, as it will increase the society's production potential. This means that they will be able to produce more of all goods or produce some goods more efficiently than before.

An Improvement in Technology or an Increase in the Amount