What purpose does production possibility frontier serve (PPF)? What is the point or what does it show?
The main point of production possibility frontiers is to illustrate the concept of opportunity cost.
Economically speaking, every decision has an opportunity cost. Whenever one chooses to use resources for one thing, those resources cannot be used for something else. If the US economy chooses to make x number of tanks, the materials that went into those tanks cannot be made into cars.
A ppf illustrates that concept. It shows that as an economy produces more of one thing, it has to produce less of something else (assuming that it is producing at 100% of its capacity).
Additionally, ppfs are used to illustrate the ideas of efficiency and inefficiency (by points on or within the line, respectively). They also help us understand that economic growth involves being able to make more of one of the goods without having to sacrifice some of the other.
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