A production-possibilities curve (PPC), also referred to as a production-possibilities frontier, is a graph used to convey basic economic concepts, including efficiency and inefficiency, tradeoffs, and ECONOMIC GROWTH. The actual PPC is a line on a graph displaying the maximum possible output of any combination of goods using existing RESOURCES and technology. PPCs are typically used for illustrative rather than analytical purposes. The most frequently generated PPC compares an economy’s output of defense versus nondefense goods, often referred to as the “guns and butter” tradeoff. The PPC shows the possible combinations of military and civilian goods an economy can produce. Logically, during periods of war a government will command resources (through drafting soldiers and making military production CONTRACTs with industry), in essence shifting PRODUCTION in the economy from butter to guns. During periods of peace, output will shift from guns to butter. The PPC also shows tradeoffs. For instance, if a society wants more military goods, then it will have to forego nondefense goods. Resources allocated to production of certain goods are not available to produce other goods. As Rutgers University economist Dr. A. Robert Koch says, “There is always an OPPORTUNITY COST.” A combination of production on the PPC is an efficient level of output—that is, all resources are being utilized, including full EMPLOYMENT of labor resources. If an economy is not fully utilizing all its resources, it will be producing at a point inside the PPC, illustrating inefficiency. Inefficiency is typically caused by misallocation of resources, restrictions on resource use, and waste. Cultural practices, such as discrimination, also cause inefficiency. Not allowing people to do what they do best reduces the potential output of an economic system. A PPC portrays economic growth through combinations of output outside or beyond the current PPC that are not possible with the current resources and technology. Increases in the quantities of resources, improvements in the quality and use of resources, and changes in technology can all shift the PPC outward. Production-possibilities curves can also be used to illustrate individuals’ or firms’ choices and output combinations. For example, say a student has two exams tomorrow, one in economics and the other in English. She has eight hours (her resource) that she can allocate to studying for either exam or some combination. The more time she allocates to studying for one exam, the higher the likely grade will be on that exam (her production outcome). But the more time she allocates to studying for the one exam, the lower the likely grade will be on the other exam (the tradeoff). The student’s likely production-possibility curve includes combination of A in economics and F in English if she allocates all of her resources to studying economics, and the opposite if she allocates all of her time to studying English. She could also allocate half of her scarce resources to studying for each exam and possibly achieve a C on both exams. Her ideal outcome, an A on both exams, is beyond her current production-possibilities curve. To achieve an A on both exams requires 16 hours, but she only has 8 hours left to study, and if she does not study efficiently (i.e., studies with distractions like music or friends), she will likely not produce at her maximum possible production.