What happens to the production possibilities curve when an economy's capacity increases?

What happens to the production possibilities curve when an economy's capacity increases?

• A. It shifts to the left
• B. It shifts to the right
• C. It becomes a vertical line
• D. It becomes a curved downward line

Answer: (B)

When capacity grows, the economy can produce more of both goods, so the production possibilities curve shifts outward to the right. This outward shift reflects more available resources or better technology expanding the set of feasible production combinations. The curve’s general bow shape stays the same, but every point on it moves to higher output levels, illustrating greater overall production potential. Shifting left would mean less capacity, and turning into a vertical or downward-curving line doesn’t align with how capacity increases affect what can be produced.

When capacity grows, the economy can produce more of both goods, so the production possibilities curve shifts outward to the right. This outward shift reflects more available resources or better technology expanding the set of feasible production combinations. The curve’s general bow shape stays the same, but every point on it moves to higher output levels, illustrating greater overall production potential. Shifting left would mean less capacity, and turning into a vertical or downward-curving line doesn’t align with how capacity increases affect what can be produced.