Question

the following headline appear in economic times
"india nepal to sign deal for 900mw power project ."
use a diagram and economic theory to analyse the statement .

Answer 1

Due to the aforementioned deal, India will have more power supply. This means that there will raise the availability of resource for the domestic producer. As a result, there will be parallel rightwards shift of initial PPC to a new production possibility curve say PPC₂​. Now, India can produce more of both the goods that are drawn on the respective axes of the graph.