Production possibility curve
PPC and economic growth
Through an increase in the quantity of available resources and/or an improvement in
production techniques the production possibility of both goods can increase..
When this happens the production possibility curve shifts outwards from Y0 X0 to Y1 to X1.
This indicates that more of Y and X can be produced and a point such as point a is now
attainable.
It is also possible that due to an increase in the quantity of available resources and/or an
improvement in production techniques that the production of one of the goods, for
instance good X, increases.
When this happens it is now possible to produce more units of good X with the existing
resources and the production possibility curve swivels outward from Y0 X0 to Y0X1