What Happens to a Production Possibilities Frontier (With Capital Goods

question 175

Multiple Choice

What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis) when there is technological improvement?

• A) The entire frontier shifts outward.
• B) The upper part shifts outward while the lower part shifts inward.
• C) Nothing;there is no movement of the frontier.
• D) The entire frontier shifts inward.
• E) The lower part of the curve shifts outward while the upper part shifts inward.

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