Effect on production

possibility curve due to

various government policies
~Group4
 Index
 Introduction
 Assumptions of ppc
 Properties of ppc
 Effect on ppc due to various government policies
 Make in India
 PM ujjwala yojana
 GST
 Demonetization
 Sarva Siksha Abhiyan
o Conclusion
 Introduction
Production possibility curve is a diagrammatic representation showing
alternative production possibilities of two goods with the given
resources and technique of production. It is also called production
boundary or production frontier as it shows maximum possible
production with the given resources. It is also called transformation
line or transformation curve because it indicates that is more of good–
x is to be produced then factors of production will have to be
withdrawn from the production of good-y and transfer to production
of good-x.
Diagrammatic presentation
A point on the ppc indicates
efficient use of available inputs
(B,D & C) in the graph, a point
beneath the curve (such as A)
indicates inefficiency of inputs
and a point by the curve (such
as X) indicates impossibility of
inputs.
Assumptions of ppc

The resources are given and remain

constant.
The resources and technology are fully
and efficiently utilized.
The technology used in the production
process remains constant.
Properties of ppc
Downward sloping – more of one good can be produced by taking away
resources from the production to another good. Since there is inverse
relationship between change in quantity of one commodity and change
in quality of other commodity, ppc slopes downward from left to right
Concave shaped – ppc is concave shaped because of increasing marginal
rate of transformation. More and more units of one commodity are
sacrificed to gain an additional unit of another commodity.
Effect on production possibility curve due to
various government policies
 Make in India
 PM ujjwala yojana
 GST
 Demonetization
 Sarva Siksha Abhiyan
 Make in India
 Main objective is “sell everywhere but manufacture in India”
 The foreign companies investment in make in India project will have a great impact on
India economy
 It’s direct relation is with GDP of the country
 It will have a rightward shift in ppc as production increases
Advantages-
 More job opportunities
 Attract more foreign investment
 Increase of investments in India
 PM UJJWALA YOJANA
 Short run – leftward shift in ppc because
demonetization has resulted in reduced
cash in hand. The investment will decline
and so will consumption. This results
production in short run
 Long sun – rightward shift in ppc
because if the economy turns cash less,
both production and consumption will
rise. And so GDP or economic growth
would boost.
 GST
 GST will lead to increase in production potential,
increase in GDP of an economy
 National income of economy will increase.
 Since there is increase in national income with
fuller utilization of resources ppc will shift
rightward
Advantage-
 GST is a transparent tax and also reduces number
of indirect tax
Demonetization
Short run – ppc might shift backward because
demonetization has resulted in reduced cash in hand. So
Investment will decline and so will consumption and it
might result in reduced production
Long run – if the economy turns cashless both production
and consumption will rise. This will increase foreign direct
investment in country also rightward shift in ppc
Sarva siksha abhiyan
 Education provides knowledge to children where they play
significant role in life
 It make them aware about society and opportunity. It makes
them literate and confident, it helps to enhance skill and
efficiency
 Sarva siksha abhiyan causes rightward shift in ppc as it
provides efficiency to individual
 To use this knowledge in direction to make optimum use of
available resources
 It also promotes welfare of society and leads to economic
growth
 Conclusion
From a microeconomics point of view, the ppc represents the point at
which economy is most efficiently producing its good and services
We can firmly state that a nations ppc can shift both rightward and
leftward direction, depending upon the situation
Ppc also illustrates the limit that an economy has which rives us to a
conclusion that in order to achieve efficiency, the proportion of produced
goods and services must be regulated and manages correctly
Ppc saves resources as well as the money of government and public.
Bibliography
www.google.com
www.slideshare.com
www.Wikipedia.in
www.cbseguide.com
Introductory Micro-economics book
Group members-
Nasiha
Arshiya
Mariyam Fathima
Mariyam Nifa
Sabiha
Fadhwa
Suha