1. Production Possibilities Curve

2. PPC Production Possibilities Curve = a graph showing alternative ways of using productive resources. There are goods/services labeled on each axis.

3. PPC Scarcity forces us to make a decision on producing our goods/services Land for example – do we want to produce corn or cotton or both A Production Possibilities Curve allows us to visualize the different scenarios for producing the two

4. Example Lets Label everything! Good -Corn or Cotton Productions increased by 10’s to 80 Productions is in terms of Bushels

5. Charting the outcomes Use a “T” chart to show results

6. Utilizing Resources Efficiency = using resources in the most productive manner – maximizing resources Production Possibilities Frontier = the curve/line on the graph that shows the MAXIMUM possible output

7. Underutilization Underutilization = NOT using resources to their maximum potential. Occurs when there is a point BELOW the PPF Meaning we are being efficient or using resources wisely.

8. Practice 1.How many Cell Phones & Computers are produced at Point A? 2.How many Cell phones & Computers are produced at point B? 3.What was the opportunity cost of moving from Point A to Point B? 4.What was the benefit of moving from Point A to Point B? 5.What does Point C represent? 6.What would happen if there was a point ABOVE the curve? 100 – 90 – 80 – 60 – 40 – 20 – 0 - 020406080100 Cell Phones Computers B A C