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WAEC Economics 2005 Question 7

Question 7

Basic Concepts

When all factor inputs are reduced by half, the production possibility curve will shift

  1. A.outwards
  2. B.inwards
  3. C.downwards
  4. D.upwards
Show the answer and explanation

Answer: B (inwards)

Explanation

Fewer resources mean less can be produced of both goods, so the PPC shifts inwards towards the origin.