An increase in productive capability that directly increases only one output still permits more of both to be produced    Suppose the country we are considering makes discoveries that improve its ability to provide health care, but not education. If it devotes all its resources to providing education, its maximum output would still be 800 units. However, if it devotes all its resources to health care, it can provide 1600 units after this change. The new PPF that results is shown as the orange curve to the right, labeled PPF2, shifted out along the horizontal axis.

   Suppose before this change this country had chosen a point like A, shown to the right, where it provides 500 units of education and 900 units of health care. We can't know what they would choose after this change, but it is interesting to note that a point like B is now available. At point B the country can provide more units of both products: 675 units of education and 1175 units of health care. Even though there were no direct improvements in the production of education, increased capabilities in health care allow the country to have more of both! A large improvement in the ability to produce health care frees up some resources that can now be devoted to education, so an increase in the output of both is possible. Technological change in any type of production can free up resources that can be used in the production of other goods and services.

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