A technological advancement that increases the productivity of all inputs is best illustrated as:
A)a movement along the production possibilities curve.
B)a flattening of the production possibilities curve.
C)an inward shift of the production possibilities curve.
D)an outward shift of the production possibilities curve.
E)a change in the curvature of the production possibilities curve.

Question

Quizplus · Accepted Answer

An outward shift of the production possibilities curve represents an increase in the economy's productive capacity, which is brought about by technological advancements that allow for greater efficiency and higher output levels using the same amount of resources. This results in an increase in the productivity of all inputs, enabling the economy to produce more goods and services than was previously feasible, which is the best illustration of technological advancement.

A Technological Advancement That Increases the Productivity of All Inputs