Question

assume that an economy produces cotton t - shirts and metal stop signs. which of these would cause the production possibilities curve for this economy to shift outward? a an increase in the labor force b a decrease in the price of cotton c a decrease in the demand for t - shirts d an increase in the prices of both goods e the government mandates that all stop signs be made from metal

Explanation:

An outward shift of the production - possibilities curve indicates economic growth. An increase in the labor force means more resources available for production, which can expand the economy's production capacity and shift the production - possibilities curve outward. A decrease in the price of cotton doesn't directly affect the overall production capacity of the economy for both goods. A decrease in demand for t - shirts is a change in demand, not a change in the production capacity. An increase in the prices of both goods is a change in price level, not a change in production capacity. A government mandate about stop - signs is a regulatory change that doesn't affect the economy's ability to produce more of both goods in general.

Answer:

A. an increase in the labor force