Question

A shift from steam engines to diesel and electric engines has increased carrying capacity of the Indian Railways both for the passenger traffic and the goods traffic. How would you reflect this change using the concept of PPC?

Answer 1

A shift from stream engines to diesel and electric engines indicates efficiency in the production of output as railways will be able to carry more passengers and goods with the improvement in the technology. So the production possibility curve will shift to the right owing to improvement in technology.