The production possibility curve's (PPC) shape provides crucial details regarding the opportunity cost associated with creating two items. Opportunity costs are constant no matter how far down the curve you walk when the PPC is a straight line. As you proceed down the curve when the PPC is concave (bowed out), opportunity costs rise. Chance costs are declining when the PPC is convex (bowed in).
A model used to illustrate the trade-offs related to splitting resources between the production of two items is called the Production Possibilities Curve(PPC). The PPC is a useful tool for demonstrating the ideas of scarcity, opportunity cost, efficiency, and economic development and contraction. Consider Carmen, a carpenter who divides her time between building and making tables.
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