Suppose we can divide all the goods produced by an economy into two​ types:
consumption goods and capital goods.
Capital​ goods, such as​ machinery, equipment, and​ computers, are goods used to produce other goods. Suppose a technological advance occurs that affects the production of consumption goods but not capital goods. If a technological advance occurs that affects the production of consumption goods but not capital ​goods, then the production possibilities frontier will:_______.

Respuesta :

Answer: C. shift outward along the consumption goods axis.

Explanation:

The Production Possibilities Frontier is used to graph the optimal production quantities of 2 types goods in an economy given the limited resources in the economy.

This means that the frontier represents the combination of both goods can be produced given available resources and if one produces more of one good they would have to give up producing some of the other good.

If there was a technological advance that could increase the amount of consumption goods given the same resources then the PPF would shift outward along the consumption good axis to reflect this.