The production possibility frontier (PPF) is a curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors. The PPF assumes that all inputs are used efficiently.
The four key assumptions underlying production possibilities analysis are:
1. resources are used to produce one or both of only two goods,
2. the quantities of the resources do not change,
3. technology and production techniques do not change, and
4. resources are used in a technically efficient way.