Question
State factors which cause rightward (upward) shift of PP curve.
Solution
Causes of shift. Following are two main reasons for rightward shift of PP curve :
(i) When resources of an economy increase. It may be in the form of discovery of new natural resources, availability of new machinery through saving and investment, and increase in skilled and unskilled labour through population growth. As a result more of two goods can be produced causing rightward shift of PPC.
(it) When there is improvement in technology. It happens as a result of work of scientists, engineers and inventors over a long period. Then more of two goods can be produced with the given amount of resources causing shift of PPC to the right.
