Which scenario could shift the production possibilities curve outward?

The correct choice refers to technological advancements, as these innovations lead to improved efficiency and productivity within an economy. When new technologies are developed, they often allow for the same amount of resources to produce more goods or enable the production of new goods altogether. This enhancement means that the economy can operate at a higher capacity, effectively shifting the production possibilities curve outward.

This outward shift indicates an increase in the potential output of an economy, showcasing the ability to produce more combinations of goods and services than before. It reflects the overall growth and progress in an economy as a result of innovation.

In contrast, increased consumer demand typically affects the quantity demanded for goods and can lead to short-term adjustments in production rather than fundamentally changing the economy's capacity. Higher taxes on production would decrease the profitability for businesses, likely leading to a contraction in production capacity. Increased regulations could also impose restrictions that limit production, thereby not contributing to an outward shift in the production possibilities curve. Thus, technological advancements stand out as the primary factor capable of expanding an economy's productive capabilities.