How can economy move from a point within its production possibility curve (PPC) to a point on it?

Answer 1

Being inside the PPC implies that either:

1. some of the available inputs (capital, labour etc) are not being fully utilised. This happens when there is unemployment (ie not all available workers are working). or
2. when the available inputs are not being combined efficiently.

Therefore, an economy moves onto its PPC when neither of these things holds. Therefore, if you have an economy with 10 people and 6 machines, but only 8 of the people are working, not all of teh possible inputs are employed. Getting the other 2 people to work should increase production/output/incomes and move you onto or toward the PPC.

Similarly, to illustrate not combining the inputs correctly, consider an economy with two workers, and two pieces of machinery: a shovel and a crane. Suppose that one worker is using the crane to dig holes and the other is using the shovel to lift things, then they won't be working as productively as they could be. If they swap, so that one person is using the crane to lift things and the other is using the shovel to dig holes, and there are no unemployed workers or capital/machinery, then the economy will have moved onto its PPC.

Answer 2

No, it isn't authentic. regrettably maximum economies truly some the time perform in the (below the) production probability frontier and not in any respect on the frontier or curve. The production possibilitiy frontier/ curve supplies the technically effective mixture of optimal outputs of diverse commodities that are technically conceivable given the elements/ inputs accessible. yet such technical performance is seldom attained. the authentic economies commonly perform the position it would want to were conceivable to produce extra of atleast one commodity than is somewhat produced given the elements/ inputs. notwithstanding, in competitieve markets, companies are below pressuire to envision technical performance and consequently the authentic economies might want to somewhat paintings very on the point of the theoretical production probability frontier. when you consider that authentic economies isn't in a position to achieve the technical performance with perfection, for emperical puroposes the technical inefficiency might want to correctly be assumed away and the emperically valid production probability fronteir turns into suitable. So production possibilty frontier empirically estmated is depending on the conception that the authentic economies perform on the a possibility production probability frontier. it is in a sense an approximation,.

Answer 3

By eliminating waste...

Answer 4

eliminating waste