PPC when a new seed triples the yield of rice

The PPC before the change. With rice on the x-axis and cars on the y-axis, the production possibility curve (PPC) shows the largest output of cars the economy can make for each output of rice (and the other way round) when all its resources are fully and efficiently used. It is drawn for a given state of technology and given resources; a change in technology in either industry moves it.

What the change does. The new variety of seed raises output only in rice: the same land, labour and capital now give three times as much rice. Nothing changes in the car industry, which does not use seed.

• Rice intercept. If all resources are put into rice, the economy now grows three times as much rice as before, so the point on the x-axis moves out to three times its old distance from the origin.
• Car intercept. If all resources are put into cars, the seed is irrelevant and car output is exactly what it was, so the point on the y-axis does not move.
• Points in between. For any division of resources, car output is unchanged while rice output triples, so every point of the curve (other than the car intercept) moves horizontally to the right, to three times its old rice output.

The new PPC. The PPC rotates outward about its fixed point on the car axis, swinging out along the rice axis. It becomes flatter: each extra car now means giving up three times as much rice as before, and each extra unit of rice costs only a third of the cars it used to cost. So the opportunity cost of rice in terms of cars falls, which is the slope effect of a change that favours one good only.

Conclusion. A technical advance confined to rice shifts the PPC outward only on the rice axis: the rice intercept triples and the car intercept stays where it was, so the economy can have more rice for any given output of cars.