ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A shift of the PPC inward
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A shift of the PPC outward
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A shift along the curve
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No change
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Detailed explanation-1: -If a natural disaster occurs, it will destroy most of the natural resources. The decline in the resources will shift the production possibility frontier (PPF) curve inward. This is because PPF shows the possible mix of goods produced with the given technology and resources.
Detailed explanation-2: -WHAT CAUSES SHIFT IN PPC? Shifts in the production possibilities curve are caused by things that change the output of an economy, including advances in technology, changes in resources, more education or training (that’s what we call human capital) and changes in the labour force.
Detailed explanation-3: -A PPC will shift inwards or outwards when there is a change in the factors of production. The factors of production are land, labour, capital, and enterprise. When a factor of production such as capital increases, the PPC shifts outwards, indicating that the economy can produce more.
Detailed explanation-4: -When the economy grows and all other things remain constant, we can produce more, so this will cause a shift in the production possibilities curve outward, or to the right. If the economy were to shrink, then, of course, the curve would shift to the left.