Production possibility curve or production possibility Frontier is a hypothetical representation of two goods that can be obtained by shifting resources from one product to another. So basically it shows different combinations of two goods with given resources and given Technology.
There are some assumptions:
1. Resources are limited
2. Resources are fully utilised.
3. Technology is constant.
We can take an example in this. Suppose if a person has a piece of land and he wants to grow wheat and cotton at the same time. If he is growing 10 kg of wheat and 5 kg of cotton and now he wants to increase the production of cotton then he has to sacrifice few kgs of wheat because of the limited resources. So basically he has to trade off between the two products. When we will put this in a graph it will be a concave graph. It will be a downward sloping curve from left to right.
There are some assumptions:
1. Resources are limited
2. Resources are fully utilised.
3. Technology is constant.
We can take an example in this. Suppose if a person has a piece of land and he wants to grow wheat and cotton at the same time. If he is growing 10 kg of wheat and 5 kg of cotton and now he wants to increase the production of cotton then he has to sacrifice few kgs of wheat because of the limited resources. So basically he has to trade off between the two products. When we will put this in a graph it will be a concave graph. It will be a downward sloping curve from left to right.
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