Draw the ppc and indicate the …

PPF which is called Production Possibility Frontier is a curve indicating various possibilities of two goods which can be produced by using available resources and given level of technology. It shows that all the available resources and technology are optimally utilised if a country is producing maximum amount of goods and services. The curve shows that any combination of goods which lie on the production possibility frontier can be achieved if all the resources are fully utilised. Any production combination below the production possibility frontier indicates that the resources are not optimally utilised in the production process.

In the given figure, P1​P1​ the production possibility curve represents the different combinations between two goods which can be produced in an economy given the resources and technology. However, if there is any growth of resources in the economy it leads to an outward shift in the production possibility curve in the economy. This growth in the resources/technology leads to a shift in the PPC, as given by P2​P2​ curve.