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Shifting the PPF or PPC

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Shifting the PPF or PPC

  1. 1. Shifting the PPF
  2. 2. 4 Key Assumptions Revisited • Only two goods can be produced • Full employment of resources • Fixed Resources (4 Factors) • Fixed Technology What if there is a change? 3 Shifters of the PPC 1. Change in resource quantity or quality 2. Change in Technology 3. Change in Trade 2 Production Possibilities
  3. 3. Robots Pizzas What happens if there is an increase in population? 3 Production Possibilities
  4. 4. Robots Pizzas What happens if there is an increase in population? 4 Production Possibilities
  5. 5. Robots Pizzas What if there is a technology improvement in pizza ovens 5 Production Possibilities
  6. 6. Robots Pizzas What if there is a technology improvement in pizza ovens 6 Production Possibilities
  7. 7. Panama – Favors Consumer Goods Mexico – Favors Capital Goods Consumer goods CapitalGoods Current PPC Future PPC Consumer goods CapitalGoods Future PPC Current PPC Capital Goods and Future Growth MexicoPanama 7 Countries that produce more capital goods will have more growth in the future.

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