Enter the change in y and the change in x of a PPF (production possibilities frontier) curve into the calculator to determine the slope.

## PPF Formula

The following formula is used to calculate the opportunity cost of any good using the slope of a PPF line.

OC = (Y1-Y2) / (X1-X2)

• Where OC is the opportunity cost
• Y1 and Y2 are two Y points along the PPF line
• X1 and X2 are two corresponding X coordinates on the same line

## PPF Definition

PPF, short for production possibilities frontier, sets a combination of goods and services a society can produce given what resources they have available.

Two display this, a PPF curve is often graphed. Choices outside the slope are “impossible” and choices inside the slope are inefficient.

## Example Problem

How to calculate PPF slope?

1. First, determine two y coordinates along the slope.

For this example, the y coordinates are y1=5, Y2=10.

2. Next, determine the two corresponding x coordinates.

For this problem, the x coordinates are x1=3, x2=12

3. Finally, calculate the PPF slope:

Using the formula above, the PPF slope is calculated to be:
OC = (Y1-Y2) / (X1-X2)
OC = (5-10) / (3-12)
OC = -5 / -9
OC = .555