Production Possibility Curve:

Production Possibility Curve:

PPC is a graphical representation of production possibility schedule, showing alternative production possibilities of two sets of goods with the given resources and technique of production. It is also called Production Possibility Boundary or Frontier as it shows the limit of what it is possible to produce with present resources. Also known as Transformation Line or Transformation Curve as it shows the possibility of transformation from one good to another. According to Lipsey, “The production possibility curve is that curve which shows the possible combinations of two goods that can be produced by an economy, given available resources and 

Assumptions:

1. Fixed Quantity of factors of production.

2. Full Employment of resources

3. Constant Technology

4. There should be two Goods

Properties:

1) Production Possibility Curve slopes downwards from left to right.

2) Production Possibility Curve is concave to the point of Origin.

Production Possibility Schedule: PPS is that schedule which shows alternative

production possibilities of two sets of goods with the given resources and technique

of production.