Explain the difference between a movement of a long production possibility curve and a shift of the curve
Answers
Answer:
Production possibility curve shows all different attainable combinations of the production of two commodities that can be produced in an economy with given the resources and technology which are to be fully utilized. Therefore, any point inside the production possibility curve indicates under utilization of resources because the economy can produce more with the given resources and any point beyond the production possibility curve cannot be achieved because the economy does not have the required resources to produce such amount of ouput. nation:
A movement along the PPC indicates either an increase or decrease in resources devoted for the production of 2 sets of commodities. A change from point A to B is a movement along the PPC depicting a rise in the resources allocated to Product B. Points x and y on the diagram mean a shift in the curve. When the curve shifts outward, or to the right, that means output is increasing. When the curve shifts inward, or to the left, that means output is decreasing. A shift to x means an inefficient resource allocation and that some factors of production is unemployed. A shift to point y is currently unattainable and it means an increase in the resources availiable in the economy.
Diagram attached for clarity and refrence.
Hope that helps!
