What is a PPC chart?
Table of Contents
What is a PPC chart?
The production possibilities curve (PPC) is a graph that shows all of the different combinations of output that can be produced given current resources and technology.
What is the shape of PPC?
PPC is concave-shaped because more and more units of one commodity are sacrificed to gain an additional unit of another commodity. However, if there is unemployment or inefficiency in resource utilisation, then we can produce at any point inside the PPC. This concept explains the production possibilities curve.
Why PPC is not straight line?
Why Is the PPF Often Curved Instead of Straight? The curved shape reflects the law of diminishing returns. This law states that there comes a point where an added production factor has less of an impact. For example, adding additional resources toward the production process may initially result in fairly large gains.
Why is the PPC curved?
Key features of the PPC One curve: A curve showing all possible combinations that can be produced given the current stock of capital, labor, natural resources, and technology. A straight line represents constant opportunity costs, and a bowed out line represents increasing opportunity costs.
Why is a PPC curved?
The downward slope of the production possibilities curve is an implication of scarcity. The bowed-out shape of the production possibilities curve results from allocating resources based on comparative advantage. Such an allocation implies that the law of increasing opportunity cost will hold.
Why PPC is not a straight line?
1 Answer. Its always drawn as a curve and not a straight line because there a cost involved in making a choice i.e when the quantity of one good produced is higher and the quantity of the other is low. This is known as opportunity cost.
What is PPF and how it works?
Public Provident Fund (PPF) is a retirement savings scheme offered by the Government of India with the aim of providing a secure post-retirement life to everyone. The minimum deposit you must make in the account per financial year is Rs. 500 and it can go up to Rs. 1.5 lakh.
What does the slope of PPC show?
Slope of PPC shows the ratio between the loss of output and gain of output.
