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The resources available for production are the land, the capital, the technology and the labor. The PPC shows there are limits to production, so the Botswana economy, to achieve efficiently, must decide what combination of maize and shirts can be produced.
In general terms, the maize and shirts trade off can refer to Botswana's more general and real world choice between becoming a more agricultural society and becoming a more manufacturing oriented society.
The Production Possibility Curve
We illustrate using the below assumptions:
· Botswana can only produce maize and shirts
· The level of technology does not change (and if it does the curve will also change)
· The resources of the economy can be used in the production of both maize and shirts
According to the PPC, points A, B, C all appearing on the curve represent the most efficient use of resources or minimum productive inefficiency...
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