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The Production Possibility Curve (Production Possibility Frontier)

The Production Possibility Curve (Production Possibility Frontier). PPC. The PPC is a visual representation of the various output combinations that an economy can produce between 2 AND ONLY 2 goods/services . This is a visual representation of a TRADE-OFF and OPPORTUNITY COST.

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The Production Possibility Curve (Production Possibility Frontier)

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  1. The Production Possibility Curve (Production Possibility Frontier)

  2. PPC • The PPC is a visual representation of the various output combinations that an economy can produce between 2 AND ONLY 2 goods/services. • This is a visual representation of a TRADE-OFF and OPPORTUNITY COST. • In theory, this model can be used with ANY 2 goods/services.

  3. Basic Example:

  4. Quantifying Trade-Offs/Opportunity Costs

  5. Maximum Output

  6. Shifts in the PPC - Examples The PPC will shift inward on both the X and Y axes.

  7. Shifts in the PPC - Examples

  8. Shifts in the PPC - Examples

  9. Shifts in the PPC - Examples

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