In: Economics
What is the impact of a growth in population on the production possibilities curve (PPC) and future economic growth? Include how it might shift the PPC. How are economic resources—their availability and employment—impacted by a growth in population?
Answer-
Assuming the growth in population is also a growth in employment hopefully will produce more products for consumption. This would also push the curve outward since the PPC is based on a fully employed economy, assuming a fixed availability of supplies of resources and fixed technology. Generally it is thought that increment in population brings bad effects on the economy of a country as consumption of resources increase manifolds rather it is uttered that it is a burden on economy.It is said in regard of above said opinion that what one has in one's possession is not even sufficient to fulfill one's basic necessities as the incomes in densely populated countries are less;moreover, production,income,savings and investments are also less and such countries are in the grip of vicious circle.Here in this case PPC curve will fall and future economy will have really bad effects.
The classic economic resources includes land, labour and capital. As the population rises, land reduces, labour increase, capital (human) increases, other decreases. As the population rises lesser land is available for all but the human increases therefore the number of labours increases. But the employment decreases as the employer only prefers to choose the best amongst all as the options increases. The population is increasing in different area in the different rate. It is estimated that by 2050 population will reach 9 billion in the world. In less developed countries increased the size of the population reduces per capita availability because resources are scarce. This decline in per capita availability reduces productivity. Increased population means more mouths to feed. It creates pressure on the stock of food. For this reason, the under developed countries are suffering from food shortage. People become undernourished due to an inadequate supply of food which further reduces their productivity. Because of the rapid increase in population people are pushed to forest and hilly areas and they cut forest for cultivation leading to environmental change. Increasing population growth leads more migration to urban areas with industrialization. This results in pollution of air, water, noise.