Production Possibilities Curve (PPC)
What Is Economics? Scarcity, Choice, and Economic Models
AO2·AO4·Diagram required
Syllabus requirement
Uses the PPC to illustrate scarcity, choice, and opportunity cost.
Assessment objectives
AO2 Application and AnalysisAO4 Use of Appropriate Skills
Required diagram: PPC diagram showing two goods with labelled points for efficient production, unemployment, unattainable output, and opportunity cost.
Summary
The production possibilities curve (PPC) is a diagram showing the maximum combinations of two goods an economy can produce when resources are used efficiently. It illustrates scarcity, trade-offs and opportunity cost, and how points inside, on, or beyond the curve represent unemployment/inefficiency, productive efficiency, and unattainable output respectively. The shape (linear or concave) shows whether opportunity cost is constant or increasing, which matters when evaluating production choices and policy decisions.
