production possibility frontier

A production possibility frontier (PPF) illustrates the maximum amount of goods and services an economy can produce from a given combination of resources, given its existing levels of technology and knowledge. The PPF curve illustrates the choices available in the form of the cost between two different goods that can be produced with fixed resources. A point on the PPF represents all combinations of goods and services that can be produced within an economy. The PPF is drawn precisely on the presumption that all resources are already being used in the most efficient way to produce goods and services. It implies that if a society moves inwards from a point on the PPF, increasing the production of one good, there would be a reduction in the production of another good. The overall production ability of an economy is seen at the point in the curve furthest away from the origin, which is known as the production possibility curve.