Economics - Production Possibility Curve (PPC)
Hello everyone,
I am currently revising for OCR Economics (Markets in Action) and wanted to ask if it matters how we draw the PPC - for example, must one use either straight lines or curves at certain times or can both be used for all questions which require a PPC to be drawn?
If it does, could someone tell me when I am supposed to use each one?
Thanks and good luck for your exams
I am currently revising for OCR Economics (Markets in Action) and wanted to ask if it matters how we draw the PPC - for example, must one use either straight lines or curves at certain times or can both be used for all questions which require a PPC to be drawn?
If it does, could someone tell me when I am supposed to use each one?
Thanks and good luck for your exams
Original post by L'Etudiant
Hello everyone,
I am currently revising for OCR Economics (Markets in Action) and wanted to ask if it matters how we draw the PPC - for example, must one use either straight lines or curves at certain times or can both be used for all questions which require a PPC to be drawn?
If it does, could someone tell me when I am supposed to use each one?
Thanks and good luck for your exams
I am currently revising for OCR Economics (Markets in Action) and wanted to ask if it matters how we draw the PPC - for example, must one use either straight lines or curves at certain times or can both be used for all questions which require a PPC to be drawn?
If it does, could someone tell me when I am supposed to use each one?
Thanks and good luck for your exams
The Production Possibility Frontier/Curve depends on the nature of the division of labour and the technology. Its normally either a straight line or a convex curve.
Original post by cole-slaw
The Production Possibility Frontier/Curve depends on the nature of the division of labour and the technology. Its normally either a straight line or a convex curve.
Thank you very much for your reply, Cole-Slaw
Okay, could you please tell me when I am supposed to use a Straight Line and when I am supposed to use a Convex curve?
Somebody, please? 
Original post by L'Etudiant
Thank you very much for your reply, Cole-Slaw
Okay, could you please tell me when I am supposed to use a Straight Line and when I am supposed to use a Convex curve?
Okay, could you please tell me when I am supposed to use a Straight Line and when I am supposed to use a Convex curve?
Well, think about what it shows.
A straight line means that the rate of change is constant. An increase in 1 of one of the items always always leads to a decrease of x on the other axis . It doesn't matter if you're moving from producing 1 to producing 2, or moving from producing 857 to 858. It's always the same increase (this does not necessarily mean 1. It could always be 4 or 25 or 0.6) in the other one.
A curve means that the gradient is constantly changing. An increase in one axis from 1 to 2 will result in a change of the other of x, but from 857 to 858 it will be y. The curve might be a nice smooth curve and follow an easy pattern, or it could be something more exciting.
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Original post by Juno
Well, think about what it shows.
A straight line means that the rate of change is constant. An increase in 1 of one of the items always always leads to a decrease of x on the other axis . It doesn't matter if you're moving from producing 1 to producing 2, or moving from producing 857 to 858. It's always the same increase (this does not necessarily mean 1. It could always be 4 or 25 or 0.6) in the other one.
A curve means that the gradient is constantly changing. An increase in one axis from 1 to 2 will result in a change of the other of x, but from 857 to 858 it will be y. The curve might be a nice smooth curve and follow an easy pattern, or it could be something more exciting.
Posted from TSR Mobile
A straight line means that the rate of change is constant. An increase in 1 of one of the items always always leads to a decrease of x on the other axis . It doesn't matter if you're moving from producing 1 to producing 2, or moving from producing 857 to 858. It's always the same increase (this does not necessarily mean 1. It could always be 4 or 25 or 0.6) in the other one.
A curve means that the gradient is constantly changing. An increase in one axis from 1 to 2 will result in a change of the other of x, but from 857 to 858 it will be y. The curve might be a nice smooth curve and follow an easy pattern, or it could be something more exciting.
Posted from TSR Mobile
Thank you very much for your reply, Juno!
1) So, for example if the PPC represented something along the lines of how a certain firm will use £1 million pounds for investment, it will be a straight line? (Assuming both items cost the same and cannot be bought 'partially'.
2) If used to represent Government Spending on Healthcare and Defence it will be a curve as it is simply a simplified model without as much information as the one above? (Less details about exact cost etc.)
The linear straight line curve is good to represent opportunity cost, the curve one is more realistic, the opportunity cost gets a lot greater when the line gets steeper like the straight line, ppc is used to represent the maximum potential level output of 2 goods and services that an economy can produce given the level of technology, remember it can show, it isn't what the economy is actually producing.
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