1. Module 3- The Production Possibilities Curve
By J.A.SACCO

2. The PPC What is the Production Possibilities Curve?
Economic model that illustrates the concept of opportunity cost and trade –offs given fixed resources (factors of production)
the graph shows the various combinations of amounts of two commodities that an economy can produce
it defines productive efficiency in the context of that production set

3. The PPC What are the two goods being produced?
What is being produced at Point A? D? H?
What is the opportunity cost from moving from Point A to B? Point C to F? Point E to C? Point G to B?
What do you notice about the opportunity cost of the goods being produced?
What does Point I illustrate?
What does Point J illustrate? Can this be achieved?
What is the opportunity cost of moving from Point I to D?
What happens to the PPC if more resources are discovered for Luxury Cars and not Economy Cars?
Why is the PPC important?

4. Production Possibilities Curve (PPC)A
140 . B
120 J C
100 . D
Economy Cars 80 I E 60 F 40 G 20 H 20 40 60 80
100
120
140
Luxury Cars