1.

03 THE PRODUCTION
POSSIBILITIES CURVE
Economics

A Production Possibilities Curve is an incredibly useful model in economics. It illustrates scarcity, trade-
offs, opportunity cost, efficiency, underutilization, and the Law of Increasing Opportunity Costs.

Part A: Create a Production Possibilities Curve

Step 1
Select a country and data set from the end of this document. Choose from among the following
nations and their products to determine the data you will use to draw the curve:

Fishway | Barkalarkus | Kittystan | Ratagascar

Step 2
Graph a Production Possibilities Curve using the data from your chosen country.

Step 3
Label your Production Possibilities Curve with the following:

● Country name
● Product names on the appropriate axis
● The correct letter (A,B,C,D,E) for each plotted point

Part B: Add a little more and answer some questions

Question 1: Identify inefficiency

● Identify a place where there is underutilization for your country. Label it point “F.”
● What are the coordinates for your Point F? How does Point F on your graph show
underutilization?

Identify a place where there is underutilization for Kittystan! Label it point “F.”

Determine the coordinates for Point F. It should be at the last point on the PPC where X is at its
maximum (30) but Y is not at its maximum (0). Point F indicates underutilization because Kittystan
could produce more Boxes without sacrificing any Catnip Treats. So, Point F would be (30, some
value less than 75).

1.03 THE PRODUCTION POSSIBILITIES CURVE | Economics 1

Question 2: Identify a point that is unattainable
● Identify a place where production will be unattainable. Label it point “G.”
● What are the coordinates for Point G? How do you know it is not possible to produce at that
level?

M,Identify a place where production will be unattainable. Label it point “G.”

Determine the coordinates for Point G. It should be beyond the PPC, where Kittystan cannot
produce. For Kittystan, it means producing more Catnip Treats (X) than they have resources
for, so Point G would be (some value greater than 30, 0).

Question 3: Calculate opportunity cost

● Calculate the opportunity cost for the y-axis product (Product B) if it moves from point C to point
D.
● How many units of Product B did it cost to move to point D?

● Calculate this movement's opportunity cost (in terms of Product B).

● How many units of Product B did it cost to shift from point C to point D on the curve?

Sample Graph

Don’t forget to plot point F and point G on the graph. The example excludes these intentionally to hide the
answer.

1.03 THE PRODUCTION POSSIBILITIES CURVE | Economics 2

Rubric

___/60 points

Criteria 15 to >12 Points 12 to >7 Points 7 to >3 Points 3 to >0 Points 0 points

All of the data is An appropriate The graph is The graph is The graph
plotted graph creation incomplete, or largely was not
accurately using method was mostly inaccurate. submitted.
Plot the an appropriate used, but some incorrect. An
Graph graph creation data is missing inappropriate
method. or is graphing
incorrectly method was
plotted. used.

All of the Most of the Some of the The graph is The graph is
following following following incorrectly not labeled.
elements are elements are elements are labeled.
accurately accurately accurately
Label the labeled: Country, labeled: labeled:
Graph x-axis product, y- Country, x-axis Country, x-axis
axis product, product, y-axis product, y-axis
Points A to G product, Points product, Points
A to G A to G

The answer fully The answer The answer Points F and Points F and
and accurately somewhat somewhat G are G are not
explains the accurately inaccurately incorrectly present.
Plot and
reason for the explains the or placed.
explain
location of points reason for the incompletely
inefficient
F and G in two location of explains the
and
answers below points F and G reason for the
unattainable
the graph. in two answers location of
production
below the graph. points F and G
points.
in two answers
below the
graph.

The answer The answer An attempt at The answer The answer

accurately makes a good calculating to #3 is to #3 is not
calculates the attempt at opportunity entirely present.
Calculate
opportunity cost calculating cost is made inaccurate.
opportunity
for product Y opportunity cost but is
Cost
between points C for product Y misrepresente
and D. between points d or
C and D. incomplete.

1.03 THE PRODUCTION POSSIBILITIES CURVE | Economics 3

Data Sets

Fishway
Point Product A: Product B:
Gravel (X) Fake Plants
(Y)

A 0 100

B 7 84

C 13 65

D 18 40

E 20 0
back to top

Barkalarkus
Point Product A: Product B:
Bones (X) Tennis Balls
(Y)

A 0 32

B 15 30

C 35 25

D 52 15

E 68 0
back to top

1.03 THE PRODUCTION POSSIBILITIES CURVE | Economics 4

Kittystan
Point Product A: Product B:
Catnip Boxes (Y)
Treats (X)

A 0 75

B 13 63

C 23 42

D 28 20

E 30 0
back to top

Ratagascar
Point Product A: Product B:
Hammocks Baby Carrots
(X) (Y)

A 0 200

B 20 170

C 40 120

D 60 50

E 70 0
back to top

1.03 THE PRODUCTION POSSIBILITIES CURVE | Economics 5