Improvements in the productivity of labor will tend to:
a. increase the supply of labor

An economy can produce various combinations of food and shelter along a production possibilities curve (PPC). Suppose a technological innovation resulted in a new, higher-yielding crop that generated more bushels of grain for a given set of land, labor, and capital resources. If this innovation did not affect the productivity of shelter production, then which of the following would be true?

a. The production possibilities curve (PPC) will shift outward equally along both axes of the graph. b. The PPC will not change. c. The PPC will rotate outward along the food axis, but will not shift on the shelter axis. d. The PPC will rotate inward along the food axis, but will not shift on the shelter axis.

(Consider This) Which of the following best explains why the solar panel companies Solyndra and Abound went bankrupt in 2011 and 2012, respectively?

A. Overreliance on government subsidies that made them inefficient. B. Oversupply of solar panels on the world market that drove down prices and made these firms uncompetitive in the market. C. Expansion of other alternative energy sources made solar power unprofitable. D. Dramatic and unexpected increases in input costs caused huge economic losses.