The PPC shifts from AB to CD as shown. The most likely cause is Two PPCs for goods X and Y. The inner curve AB runs from 40 units of Y to 50 units of X; the outer curve CD runs from 48 units of Y to 60 units of X. An arrow points from AB out to CD.

The PPC shifts from AB to CD as shown. — CUET Economics practice

The PPC shifts from AB to CD as shown.

Question 35

MediumOriginal question

The PPC shifts from AB to CD as shown. The most likely cause is

an increase in resources or better technology for both goodsCorrect answerYour answerunemployment of resourcesCorrect answerYour answera fall in the price of good XCorrect answerYour answera destructive earthquakeCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

The whole curve moves out: both maximum outputs rise (X from 50 to 60, Y from 40 to 48).
That happens when the economy's capacity grows: more resources or better technology.

Worth noting

Unemployment moves the economy inside the curve; it does not shift the curve.

Concept: Outward shift of the PPC
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsThe production possibility curve

Practise this chapter →

Ten questions from Central Problems & the PPC, at your own pace.

Practise this chapter →

Ten questions from Central Problems & the PPC, at your own pace.

The PPC shifts from AB to CD as shown.

Question 35

Explanation