1. Production Possibilities Curve
Thinking about Trade Offs, Opportunity Costs, and Efficiency

2. Production Possibilities Curve—Constant Opportunity Cost
Quantity of coconuts D 30
Not feasible
Feasible and efficient in production A 15 C B
Production
possibilities
curve
(PPC) 9
Feasible but not efficient 20 28 40
Quantity of fish

3. Production Possibilities Curve—Increasing Opportunity Cost
Quantity of coconuts 35
Producing the first
20 fish…
… requires giving up only 5 coconuts. 30
But producing 20 more fish… A 25 20 15
… requires giving up 25 more coconuts. 10
PPC 5 10 20 30 40 50
Quantity of fish

4. Production Possibilities Curve—Economic Growth
Not feasible
Quantity of coconuts
Economic growth now makes E feasible (more of both products is now possible) 35 E 30 A 25 20 15
New PPC (after economic growth) 10
Original
PPC 5 10 20 30 40 50
Quantity of fish