assume that an economy produces cotton t - shirts and metal stop signs. which of these would cause the…

assume that an economy produces cotton t - shirts and metal stop signs. which of these would cause the production possibilities curve for this economy to shift outward? a an increase in the labor force b a decrease in the price of cotton c a decrease in the demand for t - shirts d an increase in the prices of both goods e the government mandates that all stop signs be made from metal

assume that an economy produces cotton t - shirts and metal stop signs. which of these would cause the production possibilities curve for this economy to shift outward? a an increase in the labor force b a decrease in the price of cotton c a decrease in the demand for t - shirts d an increase in the prices of both goods e the government mandates that all stop signs be made from metal

Answer

Brief Explanations:

The production - possibilities curve shifts outward when there is an increase in resources or an improvement in technology. An increase in the labor force represents an increase in a key resource, which can lead to an expansion of production capabilities and thus shift the production - possibilities curve outward. Changes in prices (options B and D) and changes in demand (option C) do not directly shift the production - possibilities curve. A government mandate (option E) that restricts the use of a resource (metal in this case) may limit production and potentially shift the curve inward or not shift it outward.

Answer:

A. an increase in the labor force