+3 votes
in Economics by kratos

What does a Production Possibility Curve show? When will it shift to the right?

1 Answer

+5 votes
by kratos
 
Best answer

Production Possibility Curve shows different possible combinations of two goods that can be produced with given resources and technology.

PPC shifts rightwards when resources of an economy grow due to :

(i) Availability of new equipment.

(ii) Increase in skilled and unskilled labour through population growth.

(iii) Discovery of new natural resources, or

(iv) Availability of new or better technology.

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