Other things equal, which of the following would shift an economy\'s production

Question

Other things equal, which of the following would shift an economy's production possibilities curve to the left?
A) The discovery of a low-cost means of generating and storing solar energy.
B) The entrance of more women into the labor force.
C) A law requiring mandatory retirement from the labor force at age 55.
D) An increase in the proportion of total output that consists of capital or investment goods. Other things equal, which of the following would shift an economy's production possibilities curve to the left?
A) The discovery of a low-cost means of generating and storing solar energy.
B) The entrance of more women into the labor force.
C) A law requiring mandatory retirement from the labor force at age 55.
D) An increase in the proportion of total output that consists of capital or investment goods. Other things equal, which of the following would shift an economy's production possibilities curve to the left?
A) The discovery of a low-cost means of generating and storing solar energy.
B) The entrance of more women into the labor force.
C) A law requiring mandatory retirement from the labor force at age 55.
D) An increase in the proportion of total output that consists of capital or investment goods.

Explanation / Answer

Ans is option C

Shifts in the production possibilities curve are caused by changes in these things:

• Advances in technology

• Changes in resources

• More education or training (that's what we call human capital)

• Changes in the labor force

Basic idea is that anything that causes economic output to increase or decrease will shift this curve. An outward shift in the curve reflects growth, while an inward shift means decreasing output.

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