PPC

A CURVE THAT SHOWS ALTERNATIVE WAYS TO USE AN ECONOMY'S RESOURCES.

THE GRAPH

• Points along the curve describe the trade-off between the goods.
• The sacrifice in the production of the second good is called opportunity cost.
• The shift of PPC determines growth.
• Inside the PPC is inefficiency.

RESOURCES

• Factory goods
• Farm goods
• Ex: clothes, apples, water, wood, etc.

INEFFICIENT/UNATTAINABLE

• If we have a point inside the PPC it is inefficient
• If we have a point outside the PPC it is unattainable