Production possibilities curve

production possibilities frontier

a curve that indicates the combinations of any two goods that are attainable when available resources are fully and efficiently employed

purpose of the PPC

illustrates the concepts of scarcity, choice and opportunity cost

attainable and efficient output combinations

output combinations that are found on the PPF

unattainable output combinations

output combinations that are found to the right of the PPF

inefficient output combinations

output combinations that are found to the left of the PPC

PPF illustrates scarcity

output combinations that are found to the right of the PPF are unattainable due to there being too few resources

PPC illustrates choice

the existence of the PPF indicates a need to choose among the available combinations along the curve

PPC illustrates opportunity cost

the negative slope of the PPC indicates that more of good B can be obtained only by sacrificing some output of good A

understanding opportunity cost

it is not what is gained when a choice is made, but what was given up when a choice was made

swivel movement of the PPC

improvement in technology or productivity in the production of one of the two outputs in the PPC

outward shift of the PPC

illustrates economic growth