Production Possibilities
The maximum output that can be produced in a nation given the available technology and resources.
Suppose a country X does not engage in any international trade. Furthermore, let's suppose that country X's residents currently produce and consume only food and cars. Given its current technology and resources (people, machines and so on) country X has a fixed capability to produce food and cars. Its overall production capabilities are then its production possibilities.
Suppose a country X does not engage in any international trade. Furthermore, let's suppose that country X's residents currently produce and consume only food and cars. Given its current technology and resources (people, machines and so on) country X has a fixed capability to produce food and cars. Its overall production capabilities are then its production possibilities.