1.1.5 Production possibility diagrams

Question 1

Factors causing an outward shift to the PPC

Answer 1

• Tech improvements that increase productivity of capital equipment.
• Discovery of new resources.
• Improvements in education and training = more productive workforce.
• Changes that lead to increase in working population.

Question 2

Factors causing inward shift to PPC

Answer 2

• disasters that devestate productive resources e.g. earthwuaukes, floods.
• wars
• Global warming/ climate change = loss of farmland, rising dea levels and extreme weather.
• Prolomged recession = permanent loss of productive capacity if businesses shut.