4.

Production Possibility Curve

Production Possibility Curve (PPC)
The production possibility curve (PPC) represents the maximum combination of goods and
services which can be produced in an economy, i.e. the productive capacity of the
economy.

Shifts of the curve

For a country to shift its PPC outwards, as shown in picture, there must be economic growth,
This can come about in the following ways:

An increase in the quality of factors of production, such as

more highly skilled labour achieved through investments in education, research
and training. Increased productivity can also be caused by technological
advances and improved production techniques.

An increase in the quantity of factors of production, such as the discovery of

new resources, the reclamation of land, or net migration of labour into a country

4. Production Possibility Curve 1

4. Production Possibility Curve 2