which of the following illustrates the effect of a decrease in an economy’s resources using a production possibilities curve

A decrease in an economy’s resources is shown on a production possibilities curve (PPC) as an inward shift of the entire curve , so that at every point the maximum possible output of both goods is lower than before.

Core idea

• A PPC shows the maximum combinations of two goods an economy can produce with given resources and technology.

• When resources fall (for example, loss of labor, capital destruction, or natural disaster), the economy’s productive capacity shrinks, so it can produce less of both goods at full efficiency.

• Graphically, this is not a movement along the existing curve, but a new curve drawn closer to the origin.

What the correct illustration looks like

The option that correctly illustrates “a decrease in an economy’s resources using a PPC” will be the one where:

• The original PPC is labeled (say, PPC₁).
• A second PPC (PPC₂) lies entirely inside PPC₁, touching the axes closer to the origin for both goods.

• The shape of the curve is the same; only its position has shifted inward.

Any option that shows:

• A point moving from on the curve to inside the curve (that is underutilization , not fewer resources), or
• A shift outward (that’s economic growth , not a decrease in resources),

would be incorrect for this question.

Quick memory hook

Decrease in resources → PPC shifts inward (toward the origin) → less maximum production of all goods.

So, among “the following” diagrams, pick the one with a left-and-down (inward) shift of the entire PPC , not just a move along it.