In economic terms, a general increase in the availability of resources or technology can lead to enhanced productivity across various industries. This phenomenon can be illustrated through a graphical representation of production possibilities. For instance, consider the improvement in pizza ovens, which specifically boosts pizza production. However, a broader increase in resources—such as a growing population due to immigration or the acquisition of oil from conflict—can elevate productivity across multiple sectors.
When visualizing this concept on a graph, the initial production possibilities curve represents the economy's output capacity. Following a general increase in resources or technology, both axes of the graph shift outward, indicating that production of both goods has increased. This outward shift signifies that the economy can now produce more of both goods simultaneously, reflecting an overall enhancement in productivity.
It is important to note that inward shifts of the production possibilities curve are rare and typically occur only under extreme circumstances, such as a catastrophic event that depletes resources. In most cases, advancements in technology and resource availability lead to outward shifts, demonstrating the economy's growth potential.