PPC

Production Possibility Curves.
This shows the max quantities of different combinations of output of two products,given current resources and the state of technology.
PPC is used to show how resources are allocated.
The major difference between a developing economy and a developed economy is that, developing economy is an economy with a low level of income per head and developed economy is an economy with a high level of income per head.


There are 2 reasons,why there may be a shift outwards of a production possibility curve:
- more resources or economic growth(change in the productive potential of an economy)
- techological change