people want. However, for both the government and the market economy in the short term, increases in

production of one good typically mean offsetting decreases somewhere else in the economy.

The PPF and Comparative Advantage

While every society must choose how much of each good or service it should produce, it does not need to

produce every single good it consumes. Often how much of a good a country decides to produce depends on

how expensive it is to produce it versus buying it from a different country. As we saw earlier, the curvature of a

country’s PPF gives us information about the tradeoff between devoting resources to producing one good

versus another. In particular, its slope gives the opportunity cost of producing one more unit of the good in the

x-axis in terms of the other good (in the y-axis). Countries tend to have different opportunity costs of producing

a specific good, either because of different climates, geography, technology, or skills.
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