Which one of the following will shift the production possibility curve (PPC) of an economy to the right?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Increase in the level of resources
The PPC shows what an economy can produce with its given resources. When the level of resources rises, it can produce more of both goods, and the PPC shifts to the right.
Option (1) Under-utilisation of resources — Incorrect. Idle resources put the economy at a point below the PPC. The PPC itself does not move.
Option (2) Degradation of technology — Incorrect. Poorer technology lowers the maximum output, so the PPC shifts to the left.
Option (3) Increase in the level of resources — Correct. More resources raise the maximum output of both goods.
Option (4) Destruction of capital goods in a war — Incorrect. Losing capital goods means fewer resources, so the PPC shifts to the left.
Note: A shift of the PPC is not explained in the NCERT book (2026-27), but NTA asks questions on it, so such questions are included here. The PPC is drawn for a given amount of resources and a given technology; when these change, the whole curve moves.
NCERT (2026-27): “Production Possibility Frontier … Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy.” “The production possibility frontier gives the combinations of corn and cotton that can be produced when the resources of the economy are fully utilised. Note that a point lying strictly below the production possibility frontier represents a combination of corn and cotton that will be produced when all or some of the resources are either underemployed or are utilised in a wasteful fashion.” |