By working harder and giving up current leisure, we could increase our production of goods and services. Hypothetically, the production possibilities curve would shift outward if everyone worked more hours and took less leisure time. Strictly speaking, however, leisure is also a good, so we would simply be giving up leisure to have more of [...]

An improvement in the rules under which the economy functions can also increase output. The legal system of a country influences the ability of people to cooperate with one another and produce goods. Changes in legal institutions that promote social cooperation and motivate people to produce will also push the production possibilities curve outward. On [...]