Explain how production possibilities curves show efficiency growth and cost?

Here is a hypothetical PPF for Saudi Arabia, showing the possible production of petroleum and cement.

I have tried to draw this as a "bowed out" shape or concave to the origin. This reflects most situations where resources cannot simply be substituted directly between two production processes. Sometimes, economists show the PPF as a straight line, with a constant rate of trade-off between the two goods. The basic lessons of the PPF are mostly the same (except for the issue of whether resources can always substitute at a constant rate).

In the graph, you can see that economists measure opportunity cost as what you must give up to get something. In this case, to get more petroleum, Saudi Arabia must produce less cement. At point A, you can see that the opportunity cost of cement is relatively low. This does not mean it is the best outcome, just that additional cement does not require giving up a whole lot of petroleum. At point B, you can see that the opportunity cost of cement is higher than at point A, because you must give up more petroleum for an equivalent change in cement production.

The PPF also shows efficiency. All points along the PPF -- including both A and B -- are equally efficient. We cannot move from any point along the PPF to any other point along the PPF without sacrificing some amount of one of the goods. On the other hand, we can see that point C is inefficient: we could move to many points along the PPF that have more of both petroleum and cement.

Point D is not feasible -- we don't worry about efficiency, because it does not apply to situations that are not possible. On the other hand, if Saudi Arabia were to improve its technology or have sufficient growth in workforce population or infrastructure, perhaps point D would become possible in the future. We would draw a new PPF, which would make points A and B inefficient -- and this would represent growth, indirectly.