Question

Rod has a business making silver and gold jewelry charms in the shapes of molecules. He has five metalsmiths who work for him. One week, his production possibilities curve shifts inward. What could explain this shift?
A prominent actor begins displaying one of Rod's jewelry charms.

Rod hires two new metalsmiths, and they increase his production.

The price of gold decreases, allowing Rod to increase his gold supply.

Two metalsmiths catch a viral infection and take sick days.

Answer 1

A Production possibilities curve or Production possibilities frontier is a graph that shows the amount of production two products achieve when the given resources are efficiently utilized per unit of time. When the graph shifts outward or to the right, then the production of both products went up, but when the curve shifts to the left or inward, then the production of both products went down. Of all the options given, the only one that decreases the rate and amount of production (causing an inward shift) would be option D: "Two metalsmiths catch a viral infection and take sick days". Options A, B and C are all causes for an outward shift in the curve.

Answer 2

The best and most correct answer among the choices provided by the question is the fourth choice "Two metalsmiths catch a viral infection and take sick days."

This causes output to increase, so the production possibilities curve shifts outward, or to the right. On the other hand, let's say a major war causes destruction of capital equipment in the country. This would cause output to decrease, so in this case, the production possibilities curve shifts inward, or to the left.

I hope my answer has come to your help. God bless and have a nice day ahead!