Question

As displayed on a production possibilities curve, what will an increase in technology allow a society to do?

a.
Produce more, as long as the resources are also available.

c.
It will not affect society’s production.

b.
Produce less, because more resources are spent on developing technology.

d.
The society will spend more on the same level of production.

Answer 1

a.

An improvement in technology shifts the production possibilities curve outward, allowing the economy to produce more goods and services with the same resources (i.e., increase maximum possible output).