Answer: A combination of two goods that can be produced, using limited resources
Explanation: A Production Possibilities Curve (PPC) as the name implies is a graphical representation of all the possible combinations of goods that can be produced in an economy that would ensure profit. It is based on a number of assumptions, first and foremost among these assumptions is that, there are only two goods/commodities that can be produced.
Therefore a decision must be taken concerning how best to deploy the limited amount of resources (factors of production) in meeting the production needs. The decision must be such that would yield the best possible result.
(Please see attached diagram)
Points A, B, C, D and E on the PPC shows all possible combinations of production of both rice and crude oil in an economy and at every given point, all their resources are being fully deployed. For example at point A the economy is simultaneously producing 50 thousand tonnes of rice and 10 million barrels of crude oil. They may as well decide to produce at point D, which would be 20 thousand tonnes of rice and 40 million barrels of crude oil simultaneously.
If the economy decided to produce at point F or G, that would amount to not fully deploying all resources. Also production at points H, I and J is not possible given the current available resources.
