Understanding the World through Economic Models

Having a new source for a resource ("oil reserves") expands an economy's overall possible production possibility (i.e. an increase in potential output)

The firm is making use of existing resources (in this case labour) so there is movement closer to the curve, but it doesn't shift the curve outward because our potential output hasn't changed. Just our actual output.

This focuses on improving the health and well-being of an economy's labor force, which is an improvement in the quality of a factor of production. This could cause an increase in potential output.

Technological improvements tend to increase production possibilities, which may increase potential output.

This destruction of factors of production reduces an economy's overall capability of producing, which lowers the potential output.

This strange government act would reduce the quality of your labor force, which reduces your potential output in the future.

This one is pretty straightforward. When you have more capital goods, you increase your potential growth. Although, some firms might benefit from more capital goods than others.

As before, when you invest in human capital, you improve the quality of labor as a factor of production.

The destruction of factors of production reduces potential growth in an economy.

An increase in the quantity of a factor of production (in this case, physical capital) will increase potential output.