Factors of production such as land , labour , capital and enterprenuership ae the available resources in any economy . ThePPC depends on the availability of these resources and technology . echnological improvement , an increase in resources and a growth in the economy will result in the PPC shifting outwards as shown in Figure 1.3 . In the event of any natural disaster or a decrease in resources , the PPC will sift inwards as shown in Figure 1.3 .
The PPC shifts when there is :
1. Economic Growth
- When the country enjoys economic growth , the PPC bounds outwards . With economic growth , the production capability of a country increases as there is an expansion of resources such as land , labour , capital and entrepreneurship . The increase in output is due to the avaialblility of new resources , machinery and an increae in productivity . This will shift the PPC to the right as shown in Figure 1.4 (a) .
When a country is struck by a natural disaster such as a tsunami , a hurricane or an earthquake , natural resources are either exhausted or reduced . Thus , economic growth wil decline and there will be a decrease in outputs . This will shift the PC to the left as shown in Figure 1.4(b) .
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