why do growth of resources and technological advances shift ppc to the right? pls answer this question for 4 marks
Production possibility curve show different combination of two goods that can be produced by a country with given level of resources. They are downward sloping as country wants to produces more of one good then it has to reduce production of other good reason being resources are limited. Suppose economy has 50 labour who can produce either 10 guns or 20 butter or a combination of some gun and some butter. Now because of any reason number of labour rise to 100 then 20 guns can be produced if all labour put in production of gun or 40 butter can be produced if all labour is put in production of butter or combination of two. If we take production of butter on x-axis and that of gun of y-axis then it can be seen that when the resource that is number of labour rises the PPC shift to the right. Similar calculation can be done for improvement in technology.