Production possibility curve
Definition. A production possibility curve shows the maximum combinations of two goods that an economy can produce when all its resources are fully and efficiently employed, given the current state of technology. Points on the curve are efficient, points inside are inefficient, and points beyond it are unattainable.
Its typically concave shape reflects increasing opportunity cost, and an outward shift represents economic growth from more or better resources. It illustrates scarcity, choice, and opportunity cost.
This term belongs to The Production Possibility Curve in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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