Go to E.1.9. for the most recent version of this page



E.1.9 Use a production possibilities curve to explain the concepts of choice, scarcity, opportunity costs, trade offs, unemployment, productivity, and growth.

A diagram showing the production possibilities frontier (PPF) curve for producing "guns" and "butter"
A diagram showing the production possibilities frontier (PPF) curve for producing "guns" and "butter"

Focus Question: How does a production possibilities curve explain economic concepts?



Website that helps explain scarcity.

This video does a great job at explaining the Production Possibilities Curve.
- The owner of this channel has a lot of other economics related videos posted as well.

The Production Possibilities Frontier and its relation to Growth, Opportunity Cost, and Trade.

The Production Possibilities Frontier represents the ideal. It assumes that all resources are being used as efficiently as possible. As resources such as labor and capital decrease, the overall efficiency of the economy decreases as well.