what is the cause of the production possibilities frontier to shift to the right?

Expert Solution

Production possibilities frontier shows all the combination of the two goods which an economy can produce with all the available resources. When an economy is able to increase its output PPF curve shifts right or outwards and when an economy's output decreases, PPF curve shifts left or inwards.

Below are the factors which cause the right shift in the PPF curve:

Increase in Resources: When there is an increase in the resources in an economy, then the economy is able to produce more output. Because of the increase in output, the PPF curve shifts right.
Improvement in Technology: When there is an improvement in technology, the economy is able to produce more output with the available resources which increases the output. Due to an increase in the production of good, PPF curves shifts right.
Improvement in Productivity: When there is an improvement in the productivity of the factors of production, this causes an increase in the production of goods. This increase in the output causes a rightward shift in the PPF curve.

Rahul Sunny answered 2 years ago

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