Production Possibility Curve (PPC) shows maximum production combinations of two goods with given resources. Assumptions: Fixed resources, constant technology, full employment. The curve bends outward (concave) showing increasing opportunity costs—producing more of one good requires progressively more sacrifice of the other. Points on PPC: Efficient (full resource use). Inside PPC: Inefficient (unemployment, underutilization). Outside PPC: Impossible (given resources). Shifts: Right shift = economic growth (more resources, better technology); Left shift = economic contraction. Example: India producing agriculture vs. manufacturing. Movements along PPC = trade-off between goods. Shifts in PPC = growth or decline. ICAI questions: Interpreting positions, understanding shifts, opportunity cost from slopes. Exam tip: PPC slope = opportunity cost. A steep slope at left means agriculture is "cheaper" to produce; flat slope at right means manufacturing is "cheaper" at that point.