This document provides an introduction to production possibility curves (PPC) and production possibility frontiers (PPF). It defines a PPC/PPF as a graph showing the different rates of production for two goods that an economy can produce efficiently with limited resources. It outlines key assumptions and discusses constant, increasing, and decreasing opportunity costs as shapes of PPC curves. It then lists concepts to consider when constructing PPC graphs, such as full employment and scarcity. Finally, it discusses how shifts in resources can cause the PPC to shift left or right and provides examples of special cases to graph.

1. Economics
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Introduction to economics:
PPC/PPF
Short revision series

2. PPC/PPF
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Production possibility curve/frontier

3. What is a PPF/PPC?
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 PPC stands for production possibility curve
 PPF stands for production possibility frontier.
 A PPC is a graph that shows different rates of
production of two goods and services that an
economy can produce efficiently during a
specified period of time with a limited quantity
of productive resources or factors of
production.

4. Assumptions
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 Resources are used to produce either one or
both of only two goods
 The quantities and quality of resources do not
change
 Technology and production techniques do not
change
 Resources are used in a technically efficient
way.

5. Shapes of PPC vs. opportunity cost
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 Constant opportunity cost- straight line
 Increasing opportunity cost- concave to the
origin
 Decreasing opportunity cost- convex to the
origin

6. Now try to construct the following
PPC’s
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 Full production
 Full utilization of resources
 Full employment
 Efficient utilization of resources
 Scarcity
 Attainable point
 Unattainable point
 Alternative options
 Choices
 Productive efficiency

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 Increasing opportunity cost
 Decreasing opportunity cost
 Constant opportunity cost
 Unemployment
 Inefficient use of resources
 Wastage of resources
 Economic recession
 Economic depression
 Under utilization of resources

8. Shifts in PPC
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 Change in quality or quantity of FOP/P will
result PPC to shift either leftward of
rightward.

9. Now try to construct the following
PPC’s
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 Economic growth
 Economic decline
 Increase in production capacity
 Civil war destructing the resources of the
country
 Natural disaster
 Net out migration of skilled labour
 Increase in labour productivity

10. Now try to construct the following
PPC’s – special cases
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 Present consumption Vs future production
 Present investment Vs future production
 Achieving an unattainable point with the help
of international trade

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