the PPF. However, it does not have enough resources to produce outside the PPF.

Most importantly, the production possibilities frontier clearly shows the tradeoff between healthcare and

education. Suppose society has chosen to operate at point B, and it is considering producing more education.

Because the PPF is downward sloping from left to right, the only way society can obtain more education is by
giving up some healthcare. That is the tradeoff society faces. Suppose it considers moving from point B to

point C. What would the opportunity cost be for the additional education? The opportunity cost would be the

healthcare society has to forgo. Just as with Alphonso’s budget constraint, the slope of the production

possibilities frontier shows the opportunity cost. By now you might be saying, “Hey, this PPF is sounding like

the budget constraint.” If so, read the following Clear It Up feature.

CLEAR IT UP
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