Can a Nations production possibilities frontier ever shift inward?
Think about the production possibilites frontier. The graph sets the line for the attainable and the unattainable. A country always wants to produce on the PPF line because that is the maximum production…outside of the PPF line is unattainable, and inside this curve it is inefficient (the country is not using its resources wisely). The PPF can shift outward with new innovations and technologies as well as trade.Its shift outward is a result of economic growth. So it can shift inward with negative growth–using up all your resources. Resources means any factor of production. Like labor, natural resources, and machinery. If Saudi Arabia runs out of oil, its PPF will shift inward. If there is an outbreak of smallpox that kills off a lot of the population, the PPF shifts inward. The country can no longer produce at the same PPF because its resources have been used up or decreased in some way.
