Assume that an economy produces televisions and shoes. Which of the following would cause the production possibilities curve for this economy to shift outward? aAn increase in the labor force bAn increase in the prices of both goods cAn increase in the prices of resources used to produce both goods dA decrease in the demand for shoes eA change in consumers’ tastes in favor of televisions

The production possibilities curve (PPC) represents the maximum combination of goods and services that can be produced in an economy with the available resources and technology. It is assumed that all resources are fully and efficiently utilized.

a) An increase in the labor force: This would cause the PPC to shift outward. More labor means more production capacity, which allows for more of both goods to be produced.

b) An increase in the prices of both goods: This would not cause the PPC to shift. The PPC is concerned with physical quantities of goods, not their prices.

c) An increase in the prices of resources used to produce both goods: This would not cause the PPC to shift. Like the prices of goods, the prices of resources do not affect the physical quantities of goods that can be produced.

d) A decrease in the demand for shoes: This would not cause the PPC to shift. Changes in demand affect the choice of what to produce along the PPC, not the PPC itself.

e) A change in consumers’ tastes in favor of televisions: This would not cause the PPC to shift. Like changes in demand, changes in tastes affect the choice of what to produce along the PPC, not the PPC itself.

So, the correct answer is a) An increase in the labor force.