RELATIONSHIP BTW PRODUCTION POSSIBILITY CURVE & OPPORTUNITY COST
Hi Everyone,
Happy New Week to you all. It's another opportunity to learn and grow and
generally become better at what we already know or what we have an idea of. So
let's get started...
We are
continuing from where we stopped last time.
Interpretation/ Points
to Note from the Graph:
Points A to F on the graph indicate
efficient use of resources.
At Points O & P (Outside the curve), production is
not feasible. Production at these points are not feasible due to the limited
resources and technology.
At points K & L (Inside the
curve), production is feasible. It represents where resources are not
efficiently utilised.
The downward slope of the PPC
indicates that there is an opportunity cost of producing more of one type of
commodity and less of the other due to limited resources and technical
know-how.
