Improvements in technology

Technological advances will also increase the production capability of a country .  Possible reasons for an increase in output are new innovations , applications of new and efficient techniques of production , or the development of a better way of producing goods and services .

  For example , the country JAYA in the previous example was producing both sewing machines and butter . Through innovations in the production of sewing machines , JAYA can produce more sewing machines within the same period . This will shift the production of sewing machines to the right as shown in Figure 1.5(A) .

  If JAYA has discovered new and more efficient techniques of producing butter with a higher yield , then the production of butter will shift to the right as shown in Figure 1.5(b) .