Question

What can be done to expand the Production Possibility Frontier (PPF)

A) Minimum Wage

B) Technological Improvements

C) Price Ceiling

D) Price Floor

Answer 1

As we know, the production possibility frontier shows the combination of two goods that an economy can produce with its available resources, and the economy cannot produce beyond the production possibility frontier and if the economy wants to produce more amount of the two goods then the only possible way to produce more is through the technological improvements. As increase in technology improvements will increase the productivity of the factors of production that implies the factors of production are more efficient and capable of producing more due to the technological enhancement. So, the right answer is option B.