Using a production possibility curve diagram, explain how the curve can be used to show
the consequences of a change in the allocation of resources between the production of two
goods.

Question

Using a production possibility curve
diagram, explain how the curve can be used to
show
the consequences of a change in the
allocation of resources between the production of
two
goods

Madhumita Das · Accepted Answer

Consider the following diagram The shift from A to B represents a
shift of resources from wheat to cotton As a result, the output of
wheat falls and the output of cotton rises

Using a production possibility curve diagram, explain how the curve can be used to show the consequences of a change in the allocation of resources between the production of two goods.

Using a production possibility curve diagram, explain how the curve can be used to show
the consequences of a change in the allocation of resources between the production of two
goods.