Production possibility curve | Additional Study Material for Class 12 PDF Download

Q10. What do you mean by production possibilities of an economy? Ans. Production possibilities of an economy refers to the different combinations of goods and services which an economy can produce with the given resources and technology.  

Q11. What do you mean by production possibility frontier?  Or production possibility curve. 

Ans. Production possibility frontier (PPF) refers to graphical representation of possible combinations of two goods that can be produced with the given resources and technology, assuming that all resources are fully and efficiently utilised. Or it is the locus of various possible combinations of two goods that can produce with the given resources and technology. PPF is better understood with the help of 

following imaginary schedule and diagram  Production possibility schedule 

 The various possibilities of good X and good Y are shown in the table and diagram. If the economy uses all its resources to produce only good Y, then maximum of 21 units of Y and none of X can be produced. On the other hand if all the resources are used for Good X, then maximum of 6 units of X and none of Y can be produced. In between there are various possibilities with different combinations of good X and good Y. when points A,B,C,D,E,F and G are joined we get a curve AG known as production possibility frontier. Feasible production is shown by the area inside or on the curve. Points outside the curve are impossible.