Explain how microeconomics and macroeconomics issues may be represented using a production possibility curve?

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Definition: PPC basic economic model which shows how much an economy can produce given the existing
amount of resources.
PPC represents the different choices an economy faces - trade off
PPF can show all the possible combinations of the two goods that can be produced......... given the full utilization
of resources available to the economy...
Explain how a PPC with increasing opportunity cost illustrates the consequences of governments choice to produce more
military goods. Use a diagram to support your answer?

Define PPC
- Scarcity
- Choice/ trade off
- Opportunity cost

Military goods vs Capital

Increase the production of Military goods - reduce the

production of capital goods because the resourses are
fully utilized hence we would have to free up some
resources the from capital goods and divert them
to military goods

Consequences:
1. miltary goods - employment increase - access military goods - sell them if we we can?
2. opportunity cost capital goods - consumer goods - economy buying/ selling will decrease
unemployment - business will close increasing unemployment even more..
3. future capital will be depreciated reducing the productive capacity of the country hence we are likely to see an
inwards shift in the future leading to a recession in the economy unless heavy investment in capital is done