This lesson on shifting the production possibilities curve will be on the Basic Economic Concepts portion of the AP examination(s).



The production possibilities curve, as we know, shows the relationship between two options (one on the x-axis, the other on the y-axis) and how the opportunity cost of obtaining one over the other changes.



In the last lesson, we learned different ways the curve can look based on different opportunity costs. In this lesson, we will analyze how the same curve can shift.



Before we begin, let us cover what capital and consumer goods are.



Capital goodsare essentially those which are utilized in the production of other goods.



Consumer goods are those which are made available to the general public for personal use.



First, we can quickly cover how the curve can be shifted inward or to the left. This is extremely uncommon and won't appear on your AP examination, but is good to know because it helps us understand.



For instance, let us use this graph as an exam…