If a society tries to increase the production of potatoes by moving from D to E, it must sacrifice some apples, i.e. shifting resources away from apple production. The information in the production possibility schedule can be graphed as shown below. Each point on the PPC represents a maximum combination of apples and potatoes that can be produced at full employment of given resources . When operating on the curve, more apples mean less potatoes, and vice versa. Limited resources and fixed technology make any combination of apples and potatoes lying outside the curve, such as point U, unattainable .
Points lying inside the curve are attainable , but indicate unemployment of some resources.
The amount of other products that must be forgone to obtain more of any given product is called the Opportunity Cost . Thus as more of a good is produced, the higher the opportunity of producing that good. Moving from the production of 10 to 12 apples requires giving up 6 potatoes. Therefore, as more apples are produced, the opportunity cost of producing them rises, hence the Law of Increasing Opportunity Cost . Some Applications of Production Possibility Curves 1.