1.5 Production Possibility Curve

Question 1

Definition of PPC

Answer 1

The maximum possible combinations of two goods that an economy can produce, with all its resources fully and efficiently employed

Question 2

Causes of a shift of PPC to the right

Answer 2

1. Investment in improved technology
   - Through greater use of machinery, it should enable for the economy to produce more
   - machinery contributes to improved productivity of labour
2. Introduction of new resources
3. Increase in supply of labour
   - Increase in birth rate , increase in migration into a country , increase in retirement age
4. Improvements in human capital