Use the following to answer questions :
Figure: Consumer and Capital Goods
-(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. Technological improvements will likely:
A)shift the production possibility frontier inward to curve 1.
B)shift the production possibility frontier outward to curve 2.
C)lead to increased unemployment.
D)leave the production possibility frontier unchanged.

Question

Use the following to answer questions :
Figure: Consumer and Capital Goods 
-(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. Technological improvements will likely:
A)shift the production possibility frontier inward to curve 1. 
B)shift the production possibility frontier outward to curve 2. 
C)lead to increased unemployment. 
D)leave the production possibility frontier unchanged.

Quizplus · Accepted Answer

Technological improvements will likely shift the production possibility frontier outward, allowing for an increase in the production of both consumer and capital goods without sacrificing either. This is depicted by the movement from curve 1 to curve 2 in the figure. Therefore, the best choice is B.

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