Question

Which factors lead to a shift of the PPC?

Answer 1

Factors lead to a shift of the PPC are:

a) Change in the availability of resources

b) Technological advancement.

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 increase or decrease in the supply of the resources used for production, it is reflected in the amount of output. Therefore, the production possibility curve shifts to the right or to the left.