What does a movement along the PPF represent?

• A. A movement along the frontier caused by a change in technology.
• B. A change in the combination of goods produced using existing resources — always involves an opportunity cost.
• C. A shift outward or inward of the entire frontier.
• D. A movement of the demand curve.

Answer: (B)

Moving along the production possibilities frontier shows adjusting the mix of two goods produced with fixed resources and technology. When you move to another point on the frontier, you’re reallocating resources to produce more of one good and less of the other, which means there is an opportunity cost—the amount of the other good you must give up. If you could produce more of both goods, the frontier would shift outward; if you could produce less of both, it would shift inward. A movement of the demand curve, or a shift of the frontier due to technology or more resources, isn’t what the along-frontier change represents.