- Investment in capital i.e. plant and machinery and new technology.
- Inward migration of younger, skilled workers.
- Discovery of new natural resources.
- Improved education, training and healthcare to lift labour productivity.
What 3 things can shift the production possibilities curve?
Shifts in the production possibilities curve are caused by things that change the output of an economy, including advances in technology , changes in resources, more education or training (that's what we call human capital) and changes in the labour force.
What are the 3 shifters of PPC?
- Change in the quantity or quality of resources.
- Change in technology.
- Trade.
What does an outward shift in the PPC illustrate?
An outward shift of a PPF means that an economy has increased its capacity to produce .
What causes an outward shift in the production possibilities curve?
Outward or inward shifts in the PPF can be driven by changes in the total amount of available production factors or by advancements in technology . If the total amount of production factors like labor or capital increases, then the economy is able to produce more goods at any point along the frontier.
How does technology affect the production possibilities curve?
For the economy as a whole, an improvement in technology shifts the production possibilities frontier outward. Production Possibility Frontier (PPF): An increase in technology that allows for greater output based upon the same inputs can be described as an outward shift of the PPF, as demonstrated in this figure.
What is a PPC graph?
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.
Why is PPC concave?
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. ... And this causes the concave shape of PPC.
What is the shape of PPC curve?
The shape of a production possibility curve (PPC) reveals important information about the opportunity cost involved in producing two goods. When the PPC is a straight line , opportunity costs are the same no matter how far you move along the curve.
Does Demand Change The PPC?
Increases in the quantity or quality of resources will shift the PPC outward , making it possible to produce greater quantities of both goods. ... Decreases in the quantity or quality of resources will shift the PPC inward. This decreases the possible production of both goods.
How does unemployment affect the PPC?
UNEMPLOYMENT, PRODUCTION POSSIBILITIES: Unemployment means resources that could be used for production are not being used . And when some resources are not being used for production, the economy does not reach the production possibilities curve–the curve that corresponds to full employment.
How do you shift a PPC outward?
- Investment in capital i.e. plant and machinery and new technology.
- Inward migration of younger, skilled workers.
- Discovery of new natural resources.
- Improved education, training and healthcare to lift labour productivity.
What is PPC in microeconomics?
Term. 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.
How does a PPC show economic growth?
Economic growth in the production possibilities curve (PPC) model. The production possibilities curve illustrates the maximum combination of output of two goods that an economy can produce, such as capital goods and consumption goods . If that curve shifts out, the capacity to produce has increased.
How does technology affect production?
Technology benefits businesses as it allows them to produce higher quantities , make products more consistent and be more cost-effective. ... This both reduces costs and improves employee health. Productivity – Using machinery to mechanise or automate parts of the production process leads to an increase in productivity.
