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PRODUCTION POSSIBILITIES & PRODUCTION POSSIBILITIES CURVES, descarga…
PRODUCTION POSSIBILITIES & PRODUCTION POSSIBILITIES CURVES
ALSO CALLED
PRODUCTION POSSIBILITY BOUNDARY (PPB)
TRANSFORMATION
CURVE
BOUNDARY
FRONTIER
PRODUCTION POSSIBILITY CURVE (PPC)
PRODUCTION POSSIBILITY FRONTIER (PPF)
CONCEPT PRODUCTION POSSIBILITIES
IS A CURVE WHICH
SHOWS VARIOUS COMBINATIONS OF
THE AMOUNTS OF TWO
GOODS WHICH CAN BE
PRODUCED WITHIN THE GIVEN
RESOURCES AND TECHNOLOGY
A GRAPHICAL REPRESENTATION
SHOWING ALL THE
SHOWING ALL THE
POSSIBLE OPTIONS OF
OUTPUT FOR TWO PRODUCTS
A PPF ILLUSTRATES
SEVERAL ECONOMIC CONCEPTS
OPPORTUNITY COST
PRODUCTIVE EFFICIENCY
ECONOMIES OF SCALE
SCARCITY OF RESOURCES
SUCH AS ALLOCATIVE EFFICIENCY
EXAMPLE
IN ORDER TO BETTER
UNDERSTAND A PRODUCTION POSSIBILITIES
CURVE, IT IS HELPFUL
TO ACTUALLY SEE A
PICTURE OF ONE
PRODUCTION POSSIBILITIES CURVES
THE INPUT IS
ANY COMBINATION OF THE
FOUR FACTORS OF PRODUCTION:
NATURAL RESOURCES (INCLUDING LAND)
LABOR
CAPITAL GOODS
ENTREPRENEURSHIP
THE CURVE MEASURES
THE TRADE-OFF BETWEEN
PRODUCING ONE GOOD
VERSUS ANOTHER.
MEASURES THE MAXIMUM
OUTPUT OF TWO
GOODS USING A
FIXED AMOUNT OF INPUT
