- A ppc[ production possibility curve/ production possibility frontier] is a very important concept in economics
- it shows the maximum amount of any two products that an economy can produce with all the resources at its disposal
- it shows the maximum amount of any two products that an economy can produce with all the resources at its disposal
- Production points in a PPC can be used to show what is being produced or what could be produced in the future
- A point inside the PPC means that resources aren't being used to their full capacity and may be getting wasted
- A point inside the PPC means that maximum use of resources is being made/ resource are being used to their full potential
- Any point outside the PPC means that the economy cannot produce that amount of output with the current resources and technology at their disposal
- A movement along the PPC states that resources are being allocated as well as the opportunity cost of reallocating resources towards the production of that particular product
- A point inside the PPC means that maximum use of resources is being made/ resource are being used to their full potential
- Any point outside the PPC means that the economy cannot produce that amount of output with the current resources and technology at their disposal
- A movement along the PPC states that resources are being allocated as well as the opportunity cost of reallocating resources towards the production of that particular product
- PPC’S are usually shaped outwards as the best resources are first used to produce a particular type of product , however if resources are equally suited to producing both types of goods then the opportunity cost is constant so the PPC is drawn as a straight line
(MOC is Marginal Opportunity Cost, it will be taught in higher classes)
- the cause of a shift in the PPC includes the increase in the quality and quantity of resources
- A shift to the right in the PPC will result in an increase in the productive potential of the economy whereas a shift to the left will result in a decrease in the productive potential of the economy
- the cause of a shift in the PPC includes the increase in the quality and quantity of resources
- A shift to the right in the PPC will result in an increase in the productive potential of the economy whereas a shift to the left will result in a decrease in the productive potential of the economy