To increase our production of one good we must lower the production of another; a tradeoff. Production possibilities frontier (ppf): the boundary between those combinations of goods and services that can be produced and those that cannot. The ppf shows what we can and cannot produce. Focuses on 2 goods at a time and holds quantities of all other goods and services consistent. A model economy where everything remains the same (ceneris paribus); except the 2 goods we"re considering. The ppf sows scarcity because we cannot attain points that are outside of the frontier. Production efficiency is achieved when we produce goods and services at the lowest possible cost. Points inside the ppf are inefficient because the necessary of one good is being given up to produce the other, such as. The production is inefficient because resources are unused, misallocated or both.