How is growth in a production possibilities curve diagram shown?

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Quizplus · Accepted Answer

Growth in a production possibilities curve is shown as an outward shift of the curve. This indicates an increase in the economy's ability to produce goods and services due to factors such as improved technology or an increase in resources. A movement along the curve, to the southeast or southwest, would indicate a shift in the allocation of resources between the two goods being produced rather than an increase in overall production capacity. An inward shift of the curve would indicate a decrease in the economy's ability to produce goods and services.

How Is Growth in a Production Possibilities Curve Diagram Shown