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This is determined by the quantity and quality of resources available to it, and the state of technology. Production Possibilities. A production possibility frontier (PPF) is a curve or a boundary which shows the combinations of two or more goods and services that can be produced whilst using all of the available factor resources efficiently. economies have a production possibility curve and there any many different things that effect it. 2. Shifters of the Production Possibilities Curve (PPC) There are several factors that can cause the production possibilities curve to shift. The PPC of an economy shifts outward if: 1. Given the supplies of factors, if the productive efficiency of the economy improves by technological progress, its production possibility curve will throughout shift outwards to P 1 P 1 . Resources used in production such as coal, oil, and population in the economy increase. Distinguish between movements along and shifts in production possibility frontiers. 5.7 in which the economy is producing at point t 1 on the production possibility curve P 1 P 1, with OK 2 of capital goods at OC 1 of consumer goods. The removal of trade barriers or also known as free trade is not exempt from this list of things that affect an economies production possibility curve.Reduction in trade barriers can cause a country’s production possibility curve to shift outward. Change in the quantity or quality of resources. Trade. We normally draw a PPF on a diagram as concave to the origin. Whenever one of those factors causes supply to decrease, the supply curve shifts to the left, whereas an increase in supply results in a shift to the right. 2. This is shown in Fig. These A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. These factors include: 1. A basic definition of economic growth is required along with knowledge of the factors which might cause the production possibility frontier to shift outwards OR inwards. 3. Change in technology. Every choice the society/individual makes has an opportunity cost – to get more of one good, we need to give up some of another good – every choice has a tradeoff. Production possibility curves With the given set of resources (factors of production), an economy can manufacture either 2000 laptops or 80,000 books or a combination of these both products. Production possibilities curve demonstrates that: There is a limit to what the society/individual can achieve, given the existing institutions, technology and resources. If the economy maintains this rate of capital formation, production possibility curve will go … Shifters of the Production Possibilities Curve (PPC) There are several factors that can cause the production possibilities curve to shift. 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