The effect of an increase in productive inputs such as labor and capital can be shown by:
A)a point inside of the production possibility frontier.
B)an outward shift of the production possibility frontier.
C)a movement from one point to another along the production possibility frontier.
D)an inward shift of the production possibility frontier.

Question

Quizplus · Accepted Answer

When there is an increase in productive inputs such as labor and capital, the economy becomes more productive and efficient in using its resources. This results in an outward shift of the production possibility frontier, indicating that the economy can produce more output with the same level of resources. Therefore, the correct answer is B.

The Effect of an Increase in Productive Inputs Such as Labor