What will shift the PPC out and in?

What will shift the PPC out and in?

Income and economic growth will shift the PPC out and in. Economic growth will shift the PPC to the right as more of the two goods can now be produced.

What is a PPC graph?

Definition. production possibilities curve (PPC) (also called a production possibilities frontier) a graphical model that represents all of the different combinations of two goods that can be produced; the PPC captures scarcity of resources and opportunity costs.

Why is PPC also called PPF?

The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology. Sometimes called the production possibilities frontier (PPF), the PPC illustrates scarcity and tradeoffs.

What does a leftward shift of PPC indicate?

LEFTWARD SHIFT IN PPC: When there degradation of technology and decrease of resources of both the goods. Then Production Possibility Curve will shift to the left. This indicates the decrease in production of. both the commodities.

What does a shift in PPC indicate?

(ii) PPC also shifts to the right when there is an improvement in technology. When technological progress takes place, it is possible to produce more of two goods with a given amount resources. It implies increase in productive capacity which means that the economy can produce more of both goods.

What are the 4 assumptions of PPC?

The four key assumptions underlying production possibilities analysis are: (1) resources are used to produce one or both of only two goods, (2) the quantities of the resources do not change, (3) technology and production techniques do not change, and (4) resources are used in a technically efficient way.

What are the assumptions of PPC class 11th?

The assumptions of Production Possibility Curve (PPC) are:

• The amount of resources are fixed in an economy.
• The level of technology used is constant.
• The resources are fully and efficiently utilised.
• With the amount of resources in hand, only two goods can be produced.

What is the reason for the shape of PPC?

Production Possibility Curve (PPC) is concave to the origin because of the increasing opportunity cost. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. That is, as we move down along the PPC, the opportunity cost increases.