Factors That Shift the Ppc

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PRODUCTION POSSIBILITY CURVE.

In economics, the Production Possibility Curve (PPC) is based under the field of macroeconomics. The production possibility curve (PPC) is also termed as the production possibility frontier (PPF), a production possibility boundary or sometimes called product transformation curve. It is defined as a curve that illustrates the possibility of producing two goods or services within a specified time with all the resources given such as (labour, land, capital and the technical knowledge).

As we can see, here is an example of how the (PPC) looks like, a graph that compares between the productions rates of thetwo goods or services by mapping the production of one good on the x-axis and the production of the other good on the y-axis. It also illustrates the highest level of production that a country or a firmcan afford and the economy is allocating its resources the best way possible.
POINTS ON THE PRODUCTION POSSIBILITY CURVE.

The line connecting Points A and B is the productivity curve which separates the attainable from the unattainable. Points along the curve are said to be efficient and are the best possible combinations of resources to enable full utilization and to ensure that the country is at a full employment. All the points shown above on the production possibility curve (PPC)have an indication sign such as, points A and B are choices and the higher level of production. Point C is attainable but it shows waste of resources and inefficiency since the production has not reached its maximum level. Point D at this point due to limited resources and technology, the country or firm is unable to reach the production, whereas all the points outside the PPC are unattainable. All points on a production possibility curve are points of maximum productive efficiency or minimum productive inefficiency.

THE THREE MAIN ECONOMICS CONCEPTS USING THE (PPC) ARE: SCARCITY, OPPORTUNITY COST AND CHOICE.
SCARCITY.

One of the main



References: 1. www.wikipedia.com 2. www.investopedia.com 3. http://www.eia.gov/oiaf/servicerpt/eppats/ppusm.html 4. http://glossary.econguru.com/economic-terms 5. STANLAKE’S: INTRODUCTORY ECONOMICS.

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