A production possibility frontier is a curve that represents the rates of production of two commodities that use the same factors of production within a specified period (Bradford, 2007). Introduction Important Questions for Class 12 Economics Central Problems of An Economy, Production Possibility Curve and Opportunity Cost. Given this production possibilities curve, the economy could not produce a combination such as shown by point N, which lies outside the curve. The basic economic problem of scarcity on which Robbins’ definition of economics is based, can be explained with the aid of production possibility curve. Production possibility frontier or curve is an important concept of modern economics. The focus of all such, points is the production possibilities curve (PPC) of society. To define the implications of scarcity in an economic system. 1.Economic Problem Problem of choice or a problem of allocation of resources is the major economic problem which arises due to scarce resources and alternative uses of resources. It describes all the possible combinations of any two commodities that can be produced by an economic system by using all resources with maximum possible efficiency. To discuss the economic importance of the law of increasing opportu-nity cost. Figure 2.13 Economic Growth and the Production Possibilities Curve. With this meaning we have several other aspects also to … We shall explain below the concept Thus, any point on the curve is not only a full-employment point but also an efficient point. Production possibility curve is also called production possibility frontier. Armed with that information, business owners pick the combination that … ADVERTISEMENTS: Assumptions Made while Drawing Production Possibility Curve! Production Possibilities Schedule The table showing different possibilities of production of two goods is called production possibility schedule. Uses of Production Possibility Curve . 3. Let us discuss some important Uses of Production Possibility Curve: . This concept is used to explain the various economic problems and theories. 4. Production Possibility Curves Objectives 1. 2. 13. Because the production possibilities curve for Plant 1 is linear, we can compute the slope between any two points on the curve and get the same result. Given this production possibilities curve, the economy could not produce a combination such as shown by point N, which lies outside the curve. To define the meaning of production possibility curves. The slope of Plant 1’s production possibilities curve measures the rate at which Alpine Sports must give up ski production to produce additional snowboards. It further helps to identify an ideal combination of two commodities to produce them both with the available resources. Ans: Production possibility curve is a graphical representation which helps to analyse and illustrate the pertinent problem of choice. The nature of basic economic problems explained above can be better understood and distin­guished from each other with the aid of an important tool of modem economics known as production possibility curve. To understand the economic implication of the production possibility curve model. It enables the planning authority of a developed nation to divert the usage of its resources for the production of necessary goods to the production of luxury goods and from consumer goods to producer’s goods, after a certain point of time. 12. An economy capable of producing two goods, A and B, is initially operating at point M on production possibilities curve OMR in Panel (a). 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