Understanding Production Possibilities Curve Shifts: Explained

What causes a shift in production possibilities curve?

What is the most likely cause for a shift in the production possibilities curve from AB to CD?

The Increase in population is the most likely cause for a shift in the production possibilities curve from AB to CD

A shift in the production possibilities curve from AB to CD can be caused by various factors. It can result from technological advancement or an increase in population, both of which can increase an economy's production capacity. Changes in consumer preferences can also lead to shifts as resources are reallocated to meet new demands. Conversely, a decrease in resources, such as natural resource depletion, can cause the curve to shift inward, reflecting a reduction in the economy's capacity to produce goods and services.

The specific cause of the shift would depend on the circumstances and data provided in the accompanying diagram, which is not available.

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