CUET Preparation Today
Ram and Sunita were discussing about their economics test on Production possibility frontier. They had an argument on the topic of "Shifts in PPC". According to you, which one of the following will indicate a rightward shift in the PPC? |
Under-utilisation of resources Degradation of technology Increase in the level of resources Both 1 and 2 |
Increase in the level of resources |
The correct answer is Option 3: Increase in the level of resources A rightward shift in the Production Possibility Curve (PPC) indicates an increase in the economy's productive capacity. This can be achieved by: Increase in the level of resources: This includes factors like land, labor, capital, and technology. More resources enable the economy to produce more goods and services.
Technological advancement: Improved technology can increase efficiency and productivity, allowing the economy to produce more output with the same resources. Here's why the other options are incorrect: Under-utilization of resources: This would lead to a point inside the PPC, not a shift in the curve itself. Degradation of technology: This would lead to a leftward shift in the PPC, as the economy's productive capacity would decrease. |
