Resources are allocated to Use - $1$ and Use - $2$ to produce wheat and apples. Technology improves for the production of apples. How would it impact the PPC? Draw a suitable diagram.

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Solution

Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized. So if there is an improvement in the technology for the production of apple then the output of only apple will increase which will rotate the production possibility curve of apple outward from ab to a1b.

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Resources are allocated to Use - 1 and Use - 2 to produce wheat and apples. Technology improves for the production of apples. How would it impact the PPC? Draw a suitable diagram.

Resources are allocated to Use - $1$ and Use - $2$ to produce wheat and apples. Technology improves for the production of apples. How would it impact the PPC? Draw a suitable diagram.