Given the supplies of factors, if the productive efficiency of the economy improves by technological progress, its production possibility curve will throughout shift outwards to P 1 P 1 . These factors include: 1. A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. These Production Possibilities. Distinguish between movements along and shifts in production possibility frontiers. 2. What Are Two Factors That Would Cause The Production Possibilities Curve To Shift Outward. A basic definition of economic growth is required along with knowledge of the factors which might cause the production possibility frontier to shift outwards OR inwards. Change in technology. The PPC of an economy shifts outward if: 1. Production possibility curves With the given set of resources (factors of production), an economy can manufacture either 2000 laptops or 80,000 books or a combination of these both products. If the economy maintains this rate of capital formation, production possibility curve will go … The removal of trade barriers or also known as free trade is not exempt from this list of things that affect an economies production possibility curve.Reduction in trade barriers can cause a country’s production possibility curve to shift outward. Production possibilities curve demonstrates that: There is a limit to what the society/individual can achieve, given the existing institutions, technology and resources. We normally draw a PPF on a diagram as concave to the origin. A production possibility frontier (PPF) is a curve or a boundary which shows the combinations of two or more goods and services that can be produced whilst using all of the available factor resources efficiently. economies have a production possibility curve and there any many different things that effect it. Trade. This is shown in Fig. Points within the curve show when a country’s resources are not being fully utilised Change in the quantity or quality of resources. 3. This is determined by the quantity and quality of resources available to it, and the state of technology. 2. As a rule of thumb, natural factors generally affect how much sellers can produce, while social factors have a greater effect on how much they want to produce. Shifters of the Production Possibilities Curve (PPC) There are several factors that can cause the production possibilities curve to shift. Every choice the society/individual makes has an opportunity cost – to get more of one good, we need to give up some of another good – every choice has a tradeoff. 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