Question

In a certain economy, toys and greeting cards are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more toys and more greeting cards, relative to the quantities of those goods that are being produced now?

a. The economy experiences economic growth.
b. There is a technological advance in the toy industry, but the greeting card industry experiences no such advance.
c. There is a technological advance in the greeting card industry, but the toy industry experiences no such advance.
d. All of the above are correct.

Answer 1

The correct answer is option d.

Step-by-step explanation:

Suppose there is an economic growth the production possibility frontier will shift outwards. This will increase the production of both goods.

Suppose there is a technological advancement in the toy industry and no technological change in the greeting card industry. This means that the production of toys will require fewer resources. The excess resources can be used to increase the production of both toys and greeting cards.

Similar will be the case if there is a technological advancement in the greeting card industry and no change in the toy industry.