Answer :
The correct option is a) without any more capital or labor. Technological progress allows an economy to get more output without needing additional capital or labor. This is accomplished through labor-augmenting technological change and other productivity enhancements that come from advances in technology and increases in human capital. Economic growth is indicative of this process, as seen in the outward shift of the production possibilities curve.
Technological progress occurs when the economy gets more output without any more capital or labor. This concept is a key factor in economic growth and productivity increases. When technology improves, such as with the advent of electric power or computers, the same input can produce more output. This is because technology can lead to labor-augmenting technological change, where even small increases in labor productivity, as expressed in the Cobb-Douglas production function, can have significant effects on output.
Over time, productivity improvements are largely attributed to technological advances, which enable firms to produce goods and services more efficiently. This process also drives demand for labor, as each worker is able to produce more at any given wage. There is a positive relationship between the education and skills of the workforce and the quantity of output produced, emphasizing the value of human capital. As a result, if an economy discovers new resources or improves institutions, it can also produce more output with the given labor and capital.
The growth of an economy is thus generally caused by increases in capital, technology, human capital, and the workforce. Importantly, technological advancement shifts the production possibilities curve outward, indicating economic growth that may occur without necessarily increasing the physical quantity of labor or capital. Therefore the correct option is a) without any more capital or labor.
