Production Possibilities Curve

 The PPC exhibits the trade-offs facing an economy that produces only two goods.
The maximum quantity of one good that can be produced for each possible quantity of the other good produced.

Society MUST make CHOICES!



The PPC model shows:

Efficiency:
When resources are used to make society and individuals better off. 

Opportunity Cost
Since scarcity requires choices, the cost of making a choice is the opportunity cost (the choice forgone or given up).

Economic Growth

An improvement and/or increase in the allocation of resources for productive purposes.


Production Possibilities Curve


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