A typical per production possibility
CURVE is shown below Define
ppc, what does the point 'h' and 'L'
In the diagram implies
Answers
A production possibility curve measures the maximum output of two goods using a fixed amount of input. The input is any combination of the four factors of production: natural resources (including land), labor, capital goods, and entrepreneurship. The manufacturing of most goods requires a mix of all four. Each point on the curve shows how much of each good will be produced when resources shift from making more of one good and less of the other.
The curve measures the trade-off between producing one good versus another.
I can't see any diagram here, though I explain in it in below..hope it will help u.
What the Shape of the Curve Tells You:
The production possibility curve bows outward. The highest point on the curve is when you only produce one good, on the y-axis, and zero of the other, on the x-axis.
The widest point is when you produce none of the good on the y-axis, producing as much as possible of the good on the x-axis.
All the points in between are a trade-off of some combination of the two goods. An economy operates more efficiently by producing that mix. The reason is that every resource is better suited to producing one good than another.
Society does best when it directs the production of each resource toward its specialty. The more specialized the resources, the more bowed out the production possibility curve.
The production possibilities curve is also called the PPF or the production possibilities frontier.
The PPF simply shows the trade-offs in production volume between two choices.
All choices along the curve shows production efficiency of both goods. Production points inside the curve show an economy is not producing at its comparative advantage. Conversely, production outside the curve is not possible as more of both goods cannot be produced given the fixed resources.
The PPF is a tool that displays the right proportional mix of goods to be produced. These ideal production volumes are at levels that would profit a company or economy, the most.