Production possibilty curve/ frontier or PPC

Production possibility  curve

Assumptions:
1-Resources are given and cannot change.
2-Given resources are fully and efficiently utilised.
3-Technology is constant.

Production possibility schedule: It is the tabular representation of different possible combination of two goods which can be produced assuming above assumptions.
 
COMBINATIONS A B C D E
RICE(in Kg) 100 90 70 40 0
WHEAT(in Kg) 0 10 20 30 40 

 

Production possibility curve:It is a curve showing different possible combination of two goods which can be produced with given resources assuming above combinations.

figure -1 





  

Properties of slope of PPC:

1- Slope of PPC =loss of qn. of goodY                                     gain of qn. of good X  
2-PPC is concave.
3-PPC is downward left to right because to produce one unit of good-X we have to sacrifice some unit of good-Y 

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