Which of the Following Would Shift a Nation's Production Possibilities

question 385

Multiple Choice

Which of the following would shift a nation's production possibilities frontier outward?

• A) discovering a cheap way to convert sunshine into electricity
• B) an increase in demand for the nation's products
• C) a decrease in the unemployment rate
• D) a law requiring workers to retire at age 50

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Definitions:

External Cost

A cost of economic activity not borne by the producer or consumer, but rather by a third party or the environment, often leading to market failure.

Efficient Amount

The quantity of a product or service that achieves a perfect balance between economic efficiency and the satisfaction of all market participants.

Government Intervention

Actions taken by a government to adjust or interfere in the economic affairs of a nation, with the intention of achieving economic or societal objectives.

External Cost

Costs of a transaction that affect people other than the buyer or seller, typically not reflected in the market price, such as pollution or other negative externalities.