Production Possibility CurvePaper Rating: Word Count: 451 Approx Pages: 2
The production possibility curve (PPC) shows all the combinations of two goods that an economy can produce with a given set of resources. The line is limited by four production factors “
land which is classified as all of the natural resources available
labour, which is the human workforce
capital consists of buildings, machines and factories
entrepreneurship which binds the three factors together by risking money.
The graph below shows an example of the production possibility curve. This the simplest example of the concept and as a result is a straight line, not a curve:
The two goods being produced here are food and drink. Point A portrays a