Explain how a production possibility curve is affected when resources are inefficiently employed ain an economy ?
Dear Student,
Due to inefficient utilisation of resources the economy moves to a point below the PPC curve. It should be noted that in the given case, PPC will not shift. Shifts in the PPC takes place only in situations where the technology used for the production of goods changes or the the total endowment of resources changes.
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Due to inefficient utilisation of resources the economy moves to a point below the PPC curve. It should be noted that in the given case, PPC will not shift. Shifts in the PPC takes place only in situations where the technology used for the production of goods changes or the the total endowment of resources changes.
In case of any doubts, do get back to us.