Which of the following would most likely shift the production possibilities

Subject : Economics

Question: Which of the following would most likely shift the production possibilities curve inward?

A) an increase in the number of hours factories are in use

B) a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

C) an increase in the production of capital goods

D) technological progress

Expert Verified Solution:

The correct answer is:

B) a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

Explanation:

An inward shift of the production possibilities curve (PPC) represents a decrease in the economy’s production capacity. This shift can occur due to factors that reduce the economy’s ability to produce goods and services.

A decrease in the average number of hours worked per week means that fewer hours are dedicated to production, which reduces the overall output of goods and services. This reduction in labor input shifts the PPC inward, indicating a decrease in the economy’s productive capacity.

In contrast:

A) Increasing the number of hours factories are in use would likely increase production capacity, shifting the PPC outward.

C) Increasing the production of capital goods would also increase future production capacity, shifting the PPC outward.

D) Technological progress typically enhances production efficiency and increases the PPC, shifting it outward.