when the ppf shifts outward it implies growth in an economy when it shifts inward the economy is shrinking due to a failure to allocate resources and optimal production capability a shrinking economy could result from a decrease in supplies or a deficiency in technology 
production possibility frontier ppf and the pareto efficiencythe pareto efficiency a concept named after italian economist vilfredo pareto measures the efficiency of the commodity allocation on the ppf the pareto efficiency states that any point within the ppf curve is inefficient because the total output of commodities is below the output capacity conversely any point outside the ppf curve is impossible because it represents a mix of commodities that will require more resources to produce than are currently obtainable therefore in situations with limited resources the only efficient commodity mixes lie along the ppf curve with one commodity on the x axis and the other on the y axis an economy may be able to produce all of the goods and services it needs to function using the ppf as a guide however this may lead to an overall inefficient allocation of resources and hinder future growth when the benefits of trading with other countries are considered 