Question

When there is a growth of resources, a concave 'production possibility curve' will:
1. shift leftward
2. shift rightward
3. become straight
4. become convex

Answer 1

Correct Answer - Option 2 : shift rightward

The Correct Answer is shift rightward.

• Following a change in the underlying determinant of demand, the direction of the demand curve will shift to the left or right.
• Increases in demand are illustrated in the demand curve by a change to the right. This may be caused by a variety of factors, including an increase in sales, an increase in a substitute's price or a decrease in a supplement's price.
• A change in demand to the right implies a rise in the sum requested at any price. Conversely, for a variety of reasons, demand will decrease and cause a change to the left of the demand curve, including a decline in sales, assuming that a good is a normal good, a drop in the price of a replacement, and an increase in the price of a supplement.
• Following a shift in one or more of the underlying determinants of supply, the direction of a supply curve can change. For instance, a cost adjustment, such as a change in the cost of labor or raw materials, can shift the direction of the supply curve.
• The Production Possibility Curve (PPC) is the locus of different combinations of two commodities that can be generated with a given amount of resources and technology (the direction of a moving point). It's also known as the curve of transformation.