The production possibility curve

IntroductionThe merchandise hypothesis twist is a curve that represents the total number of goods and services that send packing be produced in an deliverance given certain levels of resources in the deliverance, the mathematical products hap curve helps check whether an economy has unfounded resources and if an economy produces optimally accordingly this lead result into economic growth, there be factors that lead to a falling out in the production adventure curve, this includes changes in technology, change in the productivity of factors of production and increased efficiency and finally the curve allow transplant as a result of increased resources in the economy.Production hazard curveThe production initiative curve is a curve that represents the uttermost or optimal resource usage when both goods and services are produced, the production initiative curve shows the position in which an economy offer be producing its goods and services, an economy that produce s below the production possibility curve is verbalise to have idle resources, when the point is on the production possibility curve accordingly the economy is optimally using all the resources available in an economy to produce both goods and services.The diagram below shows the production possibility curveThe above diagram is the production possibility curve, when the economy produces at point A thusly the economy is under producing and there are idle resource in the economy, if the economy produces at point B then the economy is producing optimally where there are no idle resources in the economy, point C is unachievable and an economy fannynot produce at this point, this is because the point is above the production possibility curve.Shift in the production possibility curveThe production possibility frontier go away shift superficial if there is increased productivity in the factors of production. If the productivity of the factors of production improves then the production possibility curve allow shift outwards as followsThe other factors that depart cause the possibility production curve to shift is the onward motion of technology, the curve will shift outward if there is an improvement in the technology in the economy.The discovery and exploitation of resources in the economy will also cause a shift in the production possibility curve, if there is a discovery and the exploitation of resources that are utilize in the production of goods and services then the curve will shift outwards.Effects of producing more goods for the future to the PPCWhen an economy produces more goods then it is possible to compass the point where the economy utilises all its factors of production and the point of production will be at along the curve, the unneeded production of goods and services will also tend to influence producers to explore new resources for production and this will lead to a shift in the curve to a high level.ConclusionThe production possibility curve depicts the total number of goods and services that can be produced in an economy given the level of resources in the economy, the productions possibility curve helps check whether an economy has idle resources and if an economy produces optimally then this will result into economic growth.There are factors that lead to a shift in the production possibility curve, this includes changes in technology, change in the productivity of factors of production and increased efficiency and finally the curve will shift as a result of increased resources in the economy.If an economy produces more goods then it achieve the point where the economy utilises all its factors of production and the point of production will be at along the curve, the excess production of goods and services will also tend to influence producers to explore new resources for production and this will lead to a shift in the curve to a higher level.ReferencesBrian Snow (1997) Macroeconomics Introduction to Macroeconomi cs, Rout shelf publishers, UK