What is ppc curve why move right to ward?
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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What is ppc curve why move right to ward?
PPC Curve and Why it Shifts Rightward
The Production Possibility Curve (PPC) represents the maximum output combinations of two goods that an economy can produce with its given resources and technology. It shows the trade-off between producing different goods efficiently.
Shift to the Right
1. Economic Growth: When an economy experiences economic growth, it can produce more goods and services with the same amount of resources. This leads to an outward shift of the PPC curve, indicating an increase in potential output levels.
2. Technological Advancements: Improvements in technology lead to increased efficiency in production processes, allowing for higher levels of output. This shift to the right reflects the economy's ability to produce more goods with the same resources.
3. Increased Investment: Higher levels of investment in capital goods can lead to an increase in the economy's productive capacity. This results in a rightward shift of the PPC curve, indicating the economy's ability to produce more goods in the future.
4. Resource Discovery: Discovering new resources or better utilizing existing resources can also shift the PPC curve to the right. This indicates an increase in the economy's potential output levels due to the availability of more resources.
5. Specialization and Trade: By specializing in the production of goods where they have a comparative advantage and engaging in trade, economies can expand their production possibilities. This results in a rightward shift of the PPC curve, reflecting the benefits of specialization and trade.
In conclusion, a rightward shift of the PPC curve signifies an increase in an economy's potential output levels due to factors such as economic growth, technological advancements, increased investment, resource discovery, and specialization and trade.