Question

explain the meaning and graph of production possibility curve

Answer 1

The production possibility curve represents graphically alternative produc­tion possibilities open to an economy.

The productive resources of the community can be used for the production of various alternative goods.

But since they are scarce, a choice has to be made between the alternative goods that can be produced. In other words, the economy has to choose which goods to produce and in what quantities. If it is decided to produce more of certain goods, the production of certain other goods has to be curtailed.