If the efficiency of resources of a country improves then what will be the position of the production possibility curve?
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☞ As we know that production possibility frontier is drawn on the assumption that resources are fully utilized . If any country is fully utilising it's resources then it is operating on the PPC .
In the situation that resources have improved their efficiency then in such condition the PPC will shift towards the right side . As from ab to cd .
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Main assumption of PPC are -
- Resources are given
- Resources are fully utilized
- Technology remains constant.
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