Which of the Following Will Most Likely Cause an Outward

question 132

Multiple Choice

Which of the following will most likely cause an outward shift in the production possibilities curve?

• A) a reduction in the man-made productive resources available to the economy as the result of a decline in investment
• B) an increase in government payments to farmers for taking land out of production
• C) an increase from 40 to 50 hours in the average number of hours worked per week
• D) None of the above would cause an outward shift in the production possibilities curve.

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Definitions:

Differentiated Product

A product that has unique characteristics compared to other products in the market, often highlighted through branding and quality to compete on factors other than price.

Downward Sloping Demand

A fundamental principle in economics that suggests demand for a product decreases as the price increases, illustrated by a demand curve that slopes downwards from left to right.

Homogeneous Product

A Homogeneous Product is one that is seen as identical or very similar in nature, quality, and performance, regardless of the producer.

Excess Capacity

A situation where a company produces less than the maximum amount it can produce due to lower demand.