Question
Define Production Possibilities Curve. Explain why it is downward sloping from left to right.
PPC is the locus of points representing different combinations of the two goods which the economy can produce from the given resources assumed to be employed fully and efficiently.
APPC is downward sloping because to produce more quantity of one good, the economy must produce less quantity of the other good. It is because resources are fixed.
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| Amount Consumed | Marginal Utility |
| 0 | - |
| 1 | 10 |
| 2 | 25 |
| 3 | 38 |
| 4 | 48 |
| 5 | 55 |