1. D C B Capital Goods A Consumer Goods
Production Possibility Curve- A visual way of illustrating the concept of opportunity cost. Shows the quantity of a good or service that must be given up to gain another good or service. The curve represents the maximum combination of 2 products that can be produced with a set amount of resources. Resources are being used in the most efficient manner possible.
Point A- NOT using all resources; attainable D C
Point B- Using all resources; attainable; more capital goods AND more consumer goods B
Capital Goods
Point C- Using all resources; attainable; More capital goods BUT less consumer goods A
Point D- Not enough resources; unattainable; beyond the maximum!
Consumer Goods

2. Less resources is often caused by war or natural disaster
More resources → PPC shifts outwards
Less resources → PPC shifts inwards
Capital Goods
Productive Resources
Natural
Human
Capital
Entrepreneurship
Technology
Consumer Goods
Less resources is often caused by war or natural disaster