PPC's

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PPC's

A PPC is a curve showing the maximum combinations of goods or services that can be produced in a set period of time given available resources.

A PPC diagram can represent opportunity cost as it shows that if you want to make more of one good / service you have to make less of another. The opportunity cost is represented by the slope of the PPC.

When an economy is operating along its PPC it is allocatively efficient.

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