F2: Production Possibilities Curve

W

X

Y

Z

Point Y represents a productively efficient combination of output using current resources.

Point Y represents a combination that cannot be produced with current resources.

Point Y represents an underutilization of resources.

Point Y represents an allocatively efficient combination of output using current resources.

There will be an overproduction of capital goods, leading to a collapse of the market.

Few consumer choices will be available, and the economy will decline to point Z.

Consumers will petition the government to reallocate resources toward Point W.

Productive capacity will increase, enabling the PPC to shift out toward Point Y.

19 balls

35 balls

15 caps

65 caps

corn production has increased.

economic growth has occurred.

production of both robots and corn has declined.

a reallocation of resources has occurred.