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

Question

Quizplus · Accepted Answer

When there is an increase in productive inputs such as labour and capital, the economy can produce more goods and services. This results in an outward shift of the production possibility frontier, indicating that there are now more possibilities for production than before. Thus, option B is the correct choice.

The Effect of an Increase in Productive Inputs Such as Labour