in this video I'll be talking about the production possibility curve so is production possibility curve it is a curve that shows the maximum output of two types of products and the combinations of those products that can be produced with the existing resources so the production possibility curve is also known as production possibility frontier or production possibility boundary here's what a production possibility curve would look like so anywhere outside the curve such as the point X is where there is not enough resources to produce both the consumer goods and the capital goods on the other hand the point inside the curve such as a is where there is inefficient use of resources and then we have the points lying on the curve such as B D and C and this is where the resources are used efficiently now let's look at the shifts in the production possibility curve so there are two types of shifts in the production possibility curve and these are art words and in words so what causes the production possibility curve to shift outwards the curve would shift outwards if there's an increase in your quality and quantity of resources and these are your factors of production when the curve shifts outwards there's an increase in the country's productive potential this allows them to produce more and increase the output which will lead them to an economic growth things like better education and advancement and technology would cause the production possibility curve to ship outwards now let's look at why the production possibility curve would shift inwards the production possibility curve will shift inwards because there is a decrease in the quality and quantity of resources or your factors of production so in the curve shifts inwards there's a decrease in the country's productive potential this means they were produced less and a decrease in output may lead to recession as their gdp Falls for example natural disasters will cause the production possibility curve to shift inwards