Productive Possibility Frontier (PPF) is a curve showing the combinations of two goods that can be produced with fixed quantities of input.

PPF depicts:

• the maximum productive potential of an economy
• efficient or inefficient allocation of resources
• possible and unobtainable production
• opportunity cost
• economic growth and decline

Inefficient point: A

Efficient point: B, D, C

unobtainable production: X

How to depict the opportunity cost on the PPF curve

<aside> ❓ Opportunity cost is the next best alternative forgone.

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Movement from point C to D results in opportunity cost of 25 units of food.

Movement from point D to C results in opportunity cost of 50 units of cloths.

❓Quiz