If technology improves and resources become more productive, the PPF will

• A. Shift inward
• B. Shift outward
• C. Remain the same
• D. A movement along the frontier due to population growth

Answer: (B)

The production possibilities frontier shows the maximum combinations of two goods an economy can produce with its available resources and current technology. When technology improves and resources become more productive, the economy can generate more output from the same inputs. This increase in productive capacity pushes the frontier outward, meaning more of both goods can be produced than before. That outward shift is what we call economic growth. A decline in resources or technology would move it inward, while no change would leave it the same. Population growth increases total resources, so the frontier expands outward rather than just a movement along an existing frontier. After the outward shift, you could then choose different combinations along the new frontier.