ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The production possibilities curve measures the trade-off between producing one good versus another.

Detailed explanation-2: -The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology.

Detailed explanation-3: -Scarcity implies that a production possibilities curve is downward sloping; the law of increasing opportunity cost implies that it will be bowed out, or concave, in shape.

Detailed explanation-4: -The production possibilities frontier (the line) shows all the possible combinations of the two products using all the available resources. Since we are using all available resources, increasing the production of one of the goods means decreasing the production of the other good (illustrates the idea of trade-offs).

Detailed explanation-5: -Key Points The Production Possibilities Frontier (PPF) is a graph that shows all the different combinations of output of two goods that can be produced using available resources and technology. The PPF captures the concepts of scarcity, choice, and tradeoffs.