The following assumptions underly the Production Possibility Curve (PPC):
In an economy, the amount of resources is fixed. They can, however, be moved from one application to another.
The technology used is always at the same level.
The resources are being put to the best possible use.
Only two things can be made using the available resources.
In the manufacture of all products, resources are not equally efficient. As a result, productivity suffers when resources are shifted from one user to another.
Final Answer: The Production Possibility Curve has become a well-known component of the modern economy. It is extremely useful in analyzing if the available resources are being completely utilized while maintaining the same level of technology, or what items can be produced with the same level of technology.