Question

An improvement in a country's legal system that enhanced the ability of citizens to protect their property rights and enforce contracts would result in which of the following changes to the country's production possibilities curve?

a) A movement from a point on the curve to a point outside the curve
b) A movement from one point to another point along the curve
c) An outward shift of the curve
d) A movement from a point on the curve to a point inside the curve

Answer 1

Answer:

The correct answer is option c.

Explanation:

An improvement in the property rights would promote innovation, investment, and, research and development. This will help in increasing production and productivity in the economy. As a result, the production possibility curve will shift outwards.

This outward movement in the frontier shows economic growth.