The production possibilities frontier (ppf), Microeconomics

The Production Possibilities Frontier (PPF)

The PPF curve exhibits the probable combinations of goods and services accessible to an economy, given that all productive resources are completely and  efficiently employed. When the economy is at point i, resources are not completely  employed and/or they are not used effectively. Point g is desirable as it gives more of both the goods, but not achievable by given the amount of resources available. Point d is one of the like combinations of goods manufactured when resources are completely and efficiently employed.

Scarcity and the PPF

To enhance the quantity of farm goods by 10 tons, we should sacrifice 100 tons of factory goods. The PPF curve is bowed out as resources are not fully adaptable to the manufacturing of the two goods. As we raise the production of one good, we sacrifice subsequently more of the other.

Posted Date: 7/24/2012 7:08:11 AM | Location : United States







Related Discussions:- The production possibilities frontier (ppf), Assignment Help, Ask Question on The production possibilities frontier (ppf), Get Answer, Expert's Help, The production possibilities frontier (ppf) Discussions

Write discussion on The production possibilities frontier (ppf)
Your posts are moderated
Related Questions

define and explain theory of production?

Divisional Str ucture Some organizations run as a number of divide, autonomous business units, synchronized by a central headquarters. This is a divisional structure.

Learning Curve in Practice * Scenario - A new firm enters chemical processing industry. * Do they: 1) Produce a low level output and sell at high price? 2) Produce

THEORY OF COSUMER  BEHAVIOUR: BASIC THEMES: We elaborated two classical theories (viz. Cardinal Approach and Ordinal Approach). In ordinal approach discussing the indifference

State trading is often associated with canalisation. Canalisation means estaolishment of state monomply in foreign trade. In other words, an item that is canalised can be imported

Define the price ceiling A price ceiling is a highest price that sellers can charge for a product.

Terms of Trade: The ratio of average price of a country's exports, to average price of its imports, is its terms of trade. Theoretically an improvement in a country's terms of trad

The definition of a price maker is a "firm with some power to set the price because the demand curve for its output slopes downward", which in effect, means those firms with a down

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr