Answer to Question #226723 in Economics for jyotsnee

Question

explain 2 economics concept shown by a production possibility curve diagram

Answer 1

The Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth, and contractions.

Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics.

Scarcity refers to a basic economic problem—the gap between limited resources and theoretically limitless wants.