AP Microeconomics / Unit 1: Basic Economic Concepts
1.3 Production Possibilities Curve
Notes
A PPC shows efficient combinations of two goods.
- Straight-line PPC: constant opportunity cost. Bowed-out: increasing opportunity cost.
- Opportunity cost is the slope.
Practice
A straight-line PPC means:
Resources equally good at both.
Moving from 10 to 15 cars costs 20 bikes. The opportunity cost of 1 car:
$\displaystyle \frac{20}{5}$.
A point outside the PPC is:
Beyond capacity.
Ready for more? Take the Unit 1 test.