Production possibilities curveThe most of one good for each amount of the other.
Capital goodsThe good on this chart's upright axis. Tools, machines and factories.
Consumer goodsThe good on this chart's level axis. Things made to be used now.
Opportunity costWhat is given up to make more of the other good.
Economic growthThe whole curve shifts outward. More of both goods can be made.
The three points 3
EfficientA point on the curve. Every resource is in use.
InefficientA point inside the curve. More of both goods could be made.
UnattainableA point outside the curve. It cannot be made with today's resources.
How this list was compiled: Every name was checked on 2026-10-03 in at least two of these. (1) Principles of Economics, version 2.0, an openly licensed textbook, sections 2.2 and 2.3 (a production possibilities curve is a graph of the different mixes of goods and services an economy is able to make; its downward slope and bowed-out shape; the law of increasing opportunity cost; idle factors of production and inefficient production put an economy inside its curve; a point outside the curve is not attainable; an outward shift of the curve is economic growth; an economy that can produce capital goods and consumer goods), https://saylordotorg.github.io/text_principles-of-economics-v2.0/s05-02-the-production-possibilities-c.html and https://saylordotorg.github.io/text_principles-of-economics-v2.0/s05-03-applications-of-the-production.html. (2) Federal Reserve Education glossary, https://www.federalreserveeducation.org/glossary (production possibilities frontier: a graphic representation of output combinations that can be produced given an economy's available resources and technology; opportunity cost: the value of the next-best alternative when a decision is made, what is given up; economic growth; inefficiency). (3) Microeconomics: Theory Through Applications, an openly licensed textbook, toolkit section Production Possibilities Frontier (points inside the frontier are possible but not efficient; points outside are not feasible given the current inputs and technology; the negative slope reflects opportunity cost; more capital, a larger workforce and technology shift the frontier outward), https://saylordotorg.github.io/text_microeconomics-theory-through-applications/s21-12-production-possibilities-front.html. (4) Wikipedia, Production–possibility frontier, https://en.wikipedia.org/wiki/Production%E2%80%93possibility_frontier (points on the frontier are efficient, points beneath it inefficient, points beyond it unattainable; the frontier is commonly drawn concave to the origin to show increasing opportunity cost; an outward shift reflects economic growth; capital goods against consumption goods as the two goods). Licence: own work
The drawing: Drawn for this site on 2026-10-03 from plain geometry. Own original chart of a made-up curve; nothing is traced or copied. Licence: own work
How it works
Here is a production possibilities curve labeled in full: the curve, its two axes, three points, opportunity cost and economic growth. The same graph is also called a production possibilities frontier, or PPF.
Read the full guide
Read the three points
The curve shows the most of one good an economy can make for each amount of the other. A point on the curve is efficient. A point inside it is inefficient: some resources are idle or badly used. A point outside it is unattainable with today's resources and technology.
Read a move and a shift
Moving down the curve gains consumer goods and gives up capital goods. What is given up is the opportunity cost. When resources or technology grow, the whole curve shifts outward, and that shift is economic growth.
Quiz yourself or print it
Press Quiz me to hide the names and place them. Print blank gives the graph without its names, to label by hand.
Any two goods can stand on the axes. This chart uses capital goods and consumer goods.
Questions and answers
What does a production possibilities curve show?
Every mix of two goods that an economy is able to make with the resources and technology it has. A point on the curve gives the most of one good for a chosen amount of the other.
What does a point inside the production possibilities curve mean?
The economy is making less than it could. Some factors of production are idle, or they are not used where they do the most. Moving onto the curve gives more of both goods.
What does a point outside the production possibilities curve mean?
A combination that cannot be produced with the current resources and technology. It comes within reach only if the curve shifts outward.
Why is the production possibilities curve bowed outward?
Because of the law of increasing opportunity cost. The more of one good is made, the more of the other good each added unit costs, so the curve gets steeper as it goes.
What shifts the production possibilities curve outward?
More or better factors of production, such as a larger workforce or more capital, and gains in technology. The outward shift is called economic growth.