Question

Can you all show me an shifts in production possibilites model and example?

Answer 1

When production potential is increased that is using the scarce resources economy is producing more of both goods. It can be shown by outward shifts of PPF. On the other hand, if economy's productive potential is decreased and producing less by using scarce resources then PPF shifts downward.

Example of outward shifts of PPF- Invention of new technology increases the productive potential so PPF shifts outward.

Example of leftward shift of PPF- Economy is hit by a destructive storm and half of the production is destroyed then productive potential will be reduced, so the economy can produce less by using scarce resources. This can be shown by leftward shifts of PPF.