Question

Discuss some things that can impact how far out a country’s production possibility curve is. One example is population. The more people the more that can be produced. Discuss some other things and gove specific examples relating to specific countries or event. For example the tsunami that hit Japande deatroyed power plants reducing their ability to generate electricity and run factories and produce things.

Answer 1

There are many factors that can affect the production possibility curve of a country. Under this we can discuss

1) Technology - Countries experiencing technological advancements will be witnessing an outward shift in the PPF curve. The technological advancements will increase the productivity of the labor. Thus increasing the production level. Example- China.

2) Natural Calamities- Countries which are prone to natural calamities experiences an inward shift in the production process example countries lose lot of their resources when hit by natural calamities such as earthquakes , tsunamis which affects Japan and countries close to pacific ring of fire.