Use the following to answer questions :
Figure 1-1
-In Figure 1-1, what could account for a shift in the frontier from AE to A' E'?
A)A decrease in unemployment.
B)A decrease in inflation.
C)A war.
D)An increase in technology.
E)None of the above.

Question

Use the following to answer questions :
Figure 1-1 
-In Figure 1-1, what could account for a shift in the frontier from AE to A' E'?
A)A decrease in unemployment. 
B)A decrease in inflation. 
C)A war. 
D)An increase in technology. 
E)None of the above.

Quizplus · Accepted Answer

An increase in technology could lead to a shift in the production frontier because it allows for more efficient production methods and increased productivity. This would likely result in an outward shift of the production frontier from AE to A' E'. Neither a decrease in unemployment nor a decrease in inflation necessarily result in a shift of the production frontier, and a war would likely have a negative impact on the economy and potentially result in a inward shift of the production frontier. Therefore, the most likely cause of the shift in the production frontier in this scenario is an increase in technology.

Use the Following to Answer Questions