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Why do we not study PPC under macroeconomics?
Why do we not study PPC under macroeconomics?
Expert Solution
Production Possibilities Curve (PPC) shows the number of units to be sacrificed of one good in order to gain one additional unit of another good. It analyses the different possible consumption bundles of an individual which is a concept of microeconomics because macroeconomics study the economy as a whole and not behavior of any one individual. However, PPC can also be drawn for a country to see and compare the comparative advantage in production of a country. The outcomes of the economy are often influenced by the individual behavior and preferences. So, that is why, PPC is covered under microeconomics.
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