WHAT DOES THE MOVEMENT ALONG A PPC CURVE SHOW....EXPLAIN IN DEATAIL WITH HELP OF A EXAMPLE
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PPC curve shows alternative production possibilities of two goods with given technique and given resources.
Movement along PPC curve shows either increase or decrease in resources or either inferior or superior use of technology or growth of both resources
Aasthachachan:
For ex. Earlier we use technology by which we need 40 units of capital and 10 units of Labour to produce 50 units of capital goods and now with new technology with 40 units of capital and 5 units of Labour we produced 60 units of capital goods
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The PPC (production possibilities curve) illustrates all the possible combinations of how we can produced these two goods given the constraints we have, including the fact that resources are scarce. The production possibility curve is convex outward from the origin because some of the economy's resources are better able to produce good y then good x.
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