Shifters of the Production Possibilities Curve (PPC)

Definition

Shifters of the Production Possibilities Curve refer to factors that cause the curve to move outward or inward, representing changes in a country's ability to produce goods and services.

Analogy

Imagine you have a pizza dough and toppings. The size of your oven and the number of toppings you have determine how many pizzas you can make. If you get a bigger oven or more toppings, your production possibilities increase, shifting the curve outward.

Related terms

Technology: Refers to advancements in machinery, equipment, and processes that improve production efficiency.

Resources: Includes land, labor, capital, and entrepreneurship used in the production process.

Trade: Involves exchanging goods and services between countries, allowing for specialization and increased production possibilities.