Production Possibility Curve (PPC)

Definition:    Production Possibility curve is described as the curve which shows the greatest possible quantities of the goods which can be produced with available resources at the given level of technology.

Example:

Combination         Consumption goods       Investment goods

                              A                                   650                                      0

                              B                                   640                                   1.0

                              C                                   510                                 3.6

                              D                                   410                                4.6

                              E                                   100                                5.2

                               F                                      0                                5.3

All the combinations on or inside PPC are achievable while those combinations outside the PPC are unattainable currently, given the resources and the level of technology.

Though, combinations of goods inside the PPC imply that the resources are not fully used or employed.

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