PPC!

The choices that society must take are often presented in terms of production possibility curve. The production possibility curve is related to the concept of opportunity cost!

The production possibilities curve shows the maximum obtainable amount of one commodity for any given amount of another commodity, as of the society's current technology and the amount of factors of production available.

The production possibility curve demonstrates that:

1) There is a limit to what you can achieve, given the existing institutions, resources, and technology.

2) Every choice you make has an opportunity cost. You can get more of something only by giving up something else.

They can look like this....

Eg1:
(straight lines)

OR the ones that we like so much X)

Eg2:

WHICH IS not straight!

USING our familiar XD FIGURE 1,
A: Attainable but productively inefficient =((

C,D,B,F: Attainable! A move from point C to F indicates an increase in the number of clothing produced. But it also implies a decrease in the amount of Food produced. This decrease is the opportunity cost of producing more clothing.

E: Unattainable due to limited resources

**If the technology improves or the supplies of factors of production increase, PPC then can shift to the right and upward, raising the amount of each good that can be produced.

**A military (war etc) or natural disasters might move the PPC inward and to the left.