Production possibilities

on line=efficient
inside line=not efficient
outside line=not attainable

ex: to get 5 black shoes, you must give up 5 brown shoe

hours of work given up/wage = opportunity costs

example 2: B france will trade wine for cheese

A pFF with specialization
2 missles for one car
OC will change if line is curved

capital= what is accumulated one period that can be used to increase production in the next