QUESTION 16 Which of the following could explain the shift in the production pos

Question

QUESTION 16 Which of the following could explain the shift in the production possibilities frontier shown in Figure 2-7 from AC to AB? Figure 2-7 Clothing per Period Pertroleum per Perio O A. technical improvements in both petroleum and clothing production . a productive improvement in clothing production that has no effect on petroleum production C. a decrease in the size of the labor force that can produce either petroleum products or clothing major oil reserves in Alaska are declared off-limits to producers in order to protect the environment major oil reserves are discovered off the coast of Africa

Explanation / Answer

Answer
Option E
Development of new oil reserves improves production of petroleum so in given resource the production of petroleum increases and the PPF shifts outside only for petroleum  
Increase in production of clothing will change clothing or for both shift whole PPF outside but here the only petroleum axis intersect is shifted outside so this is the impovment of only petrolium production happened.

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