Outward Shift of Production Possibility Curve

Steps:

• Production possibility curve (PPC) illustrates maximum output combinations of two goods given fixed resources and technology.
• A movement from XX to YY represents an outward shift, indicating expanded production capacity.
• Outward shifts result from increases in resources, technology, or efficiency.
• Evaluate options: only an increase in labor force adds to available resources.

Why D is correct:

• An increase in the labor force boosts total productive resources, expanding the economy's capacity and shifting the PPC outward, as defined in standard PPC models of economic growth.

Why the others are wrong:

• A: A decrease in scarce resources contracts capacity, causing an inward PPC shift.
• B: A decrease in resource costs improves efficiency but does not alter resource quantity or technology to shift the PPC.
• C: An increase in labor costs raises production expenses, reducing output and causing an inward shift.

Final answer: D