What does the production possibilities frontier (PPF) illustrate in economics?

The production possibilities frontier (PPF) is a graph that shows the maximum combinations of two goods that an economy can produce with its available resources and technology. It helps us understand the trade-offs between different choices; for example, if an economy is producing more of one good, it must produce less of another because resources are limited. Imagine a simple economy that can either make shoes or cars; if it decides to make more shoes, it will have to cut back on car production. The PPF illustrates not only the limits of production but also the opportunity cost, which is what is given up when choosing one option over another. By analyzing the PPF, we can see how efficiently resources are being used and make better decisions about production.