PRODUCTION POSSIBILITIES GRAPHS (PPG's)

Production Possibilities Graphs show alternative ways to use resources in an economy.
The curve of the graph is called the PPC (Production Possibilities Curve) or PPF (Production Possibilities Frontier).



                                             
Inside of the Curve- Point A

• Recession
• Underemployment
• Unemployment
• Attainable

On the Curve- Point B

• Efficient
• Attainable

Outside of the Curve- Point C

• Needs economic or technological growth to achieve
• Currently unattainable3 Types of Movement on PPC

1. Inside the PPC
2. Along the PPC
3. Shifts of the PPC

Key Assumptions of the PPC

• Only two goods are produced
• Fixed Resources
• Fixed Technology
• Full Employment (4%-5% unemployment and 90% factory capacity)
• No International Trade