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Topic: Production possibility frontier


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In the News (Tue 21 Nov 17)

  
  Production possibility frontier - Education - Information - Educational Resources - Encyclopedia - Music
The concept is used in macroeconomics to show the production possibilities available to a nation or economy (corresponding roughly to macroeconomic notions of potential output), and also in microeconomics to show the options open to an individual firm.
All points on a production possibilities curve are points of maximum productive efficiency or minimum productive inefficiency: resources are allocated such that it is impossible to increase the output of one commodity without reducing the output of the other.
The line describing this frontier is not straight, but is concave to the origin (that is, curved inward toward the axes).
www.music.us /education/P/Production-possibility-frontier.htm   (1146 words)

  
  ColombiaLink.com - PRODUCTION POSSIBILITY FRONTIER - MICROECONOMICS
In economics, the production possibility frontier (the PPF, also called the production possibilities curve (PPC) or the “transformation curve”) is a graph that depicts the trade-off between any two items produced.
The concept is used in macroeconomics to show the production possibilities available to a nation or economy (corresponding roughly to macroeconomic notions of potential output), and also in microeconomics to show the options open to an individual firm.
All points on a production possibilities curve are points of maximum productive efficiency or minimum productive inefficiency: resources are allocated such that it is impossible to increase the output of one commodity without reducing the output of the other.
www.colombialink.com /01_INDEX/index_finanzas_eng/production_possibility_frontier.html   (876 words)

  
 Production possibility frontier Details, Meaning Production possibility frontier Article and Explanation Guide
As mentioned, the two main determinants of the curve are production functions (reflecting the available technology and management techniques) and available factor endowments since they define the resources available and the most efficient combination of these resources to employ.
In neoclassical economics, production possibility frontiers can easily be constructed from the contract curves in Edgeworth box diagrams of factor intensity.
The line describing this frontier is not straight, but is concave to the origin (that is, curved inward toward the axes).
www.e-paranoids.com /p/pr/production_possibility_frontier.html   (925 words)

  
 "Production Possibility Frontier - PPF" Definition   (Site not responding. Last check: 2007-11-06)
The PPF assumes that all inputs are used efficiently.
Production Possibility Frontier - PPF - A curve depicting all maximum output possibilities of two or more goods given a set of inputs.
Production Possibility Frontier - PPF : a curve depicting all maximum output possibilities of two or more goods given a set of inputs.
www.itlocus.com /dictionary/p/production_possibility_frontier_ppf.html   (100 words)

  
 NationMaster - Encyclopedia: Opportunity cost
In some cases it may be possible to have more of everything by making different choices; for instance, when an economy is within its production possibility frontier.
Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution consequences associated with it.
In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits that could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i.e.
www.nationmaster.com /encyclopedia/Opportunity-cost   (1388 words)

  
 Production Possibility Frontier
The PPF shows all efficient combinations of output for this island economy when the factors of production are used to their full potential.
In this example, some factors of production are suited to producing both wine and grain, but as the production of one of these commodities increases, resources better suited to production of the other must be diverted.
Because the two products are almost identical in this case and can be produced equally efficiently using the same resources, the opportunity cost of producing one over the other remains constant between the two extremes of production possibilities.
www.netmba.com /econ/micro/production/possibility   (504 words)

  
 PRODUCTION POSSIBILITY FRONTIER   (Site not responding. Last check: 2007-11-06)
A production possibilities curve (PPF) shows the maximum amount of one good that can be produced (by an individual or by the society as a whole) given a production level for some other good, and given the total amounts of resources available for production of both goods, and given the technology of production.
This is what we mean when we say that there is a trade-off between the production of A and B. If we increase the amount of resources available to produce both goods, then the PPF will shift up and more units of each good could be produced at the same time.
If the production of both goods were complementary rather than competitive, then there will be no trade-off and the PPF will slope upwards.
people.umass.edu /nmalet/PPF.htm   (268 words)

  
 Production Possibility Frontier   (Site not responding. Last check: 2007-11-06)
This curve is called the "Production Possibility Frontier." It is a frontier because it shows the upper or outer limits of production of the two goods.
All of the points on the Production Possibility Frontier correspond to efficient combinations of food and machines, while any point underneath the Production Possibility Frontier corresponds to an inefficient combination of food and machines.
Put another way, the Production Possibility Frontier describes the set of all opportunities for production of machines and food that are available to us -- the opportunity set of Economian society.
william-king.www.drexel.edu /top/prin/txt/effch/ch3_ppffig.html   (398 words)

  
 Chapter 3
The production possibility frontier line separates attainable combinations of production (all points inside and on the line) from unattainable combinations (all points beyond the line).
On the production possibility frontier, the opportunity cost of producing more of one product (for example, a bottle of soda) is the output of the other good that must be foregone (for example, the tapes).
In terms of a production possibility diagram, the opportunity cost of producing a good is related to the slope of the production possibility frontier (at the point of production).
academic.udayton.edu /ECO203/chapter_3.htm   (1079 words)

  
 Practice Quiz One: Production Possibilities Frontiers
Recall that a production possibilities frontier is a graph that shows all combinations of any two goods that a society can produce when it uses all of its resources in the most efficient manner, given the current level of technology.
Answers B and C are correct, since the slope of the production possibility frontier is constant, hence the PPF is linear, and the opportunity cost of producing either good (in terms of the other good) is constant.
Both points A and B are on the production possibilities frontier, therefore Atlantis is currently using all of its resources (there is therefore zero unemployment) efficiently, and will have to continue to do so to reach point B. Therefore clearly answers A and B cannot be correct.
www.uwm.edu /People/amurshid/principles/p_quiz2.html   (1991 words)

  
 David Friedman, _Price Theory: An Intermediate Text, Ch 15
Production improvements and production efficiency provide a way of evaluating different outcomes that does not depend on our knowing the relative value of the different goods to the consumer.
A budget line, for example, is the frontier of a possibility set--the set of bundles it is possible to purchase with a given income.
In each case, points on the frontier are efficient and points not on the frontier are not, but the former are not necessarily superior to the latter.
www.daviddfriedman.com /Academic/Price_Theory/PThy_Chapter_15/PThy_Chap_15.html   (7809 words)

  
 Production Functions and the PPF   (Site not responding. Last check: 2007-11-06)
Hence, the coefficient of labor productivity in the X industry is 5, and in the Y industry is twice as large, namely 10 (at least supposing, as we shall always do, that the units of time are the same).
Where the labor productivity coefficient measures the amount of output one worker produces, the activity requirement measures the amount of work needed to produce one unit of output.
Points inside the PPF may result from unemployment, but they may also result from other forms of inefficiency -- for example, not using technology as effective as the production functions inducate is available, as well as the more obvious inefficiency of not supervising or motivating your workers as well as you might.
www.pitt.edu /~upjecon/MCG/MICRO/PPF/PPF.html   (2447 words)

  
 Production possibility frontier - Encyclopedia of Earth
Some production activities are also resource maintenance activities, of course, and the flow of output from these adds to the stock of resources available for the future.
Production of goods and services that protect the environment, or that encourage the formation of new forms of knowledge and social organization, also lead to an improved resource base.
Sustainable production activities, such as some agricultural and forestry processes when they are suitably planned and carried out, may not add to the resource base, but neither do they deplete it.
www.eoearth.org /article/Production_possibility_frontier   (2718 words)

  
 GLOBAL POLITICAL ECONOMY: Comparative Advantage Example
We now know that Britains production possibility frontier, based on trade is defined by 300 units of wheat and 450 units of iron.
The Gains from Trade:  Production Possibilities After Trade: Below are the new possible combinations of wheat and iron with trade.
We move from having two separate economies with internal rates of exchange based on their production possibility frontiers, to having a single economy in which the totals capable of being produced rises.
www.earlham.edu /~jond/econ101fall2004/CompAdvWorksheet.htm   (1451 words)

  
 Production Possibility Frontier
The Production- Possibility Frontier (or PPF) shows the maximum amounts of production that can be obtained by an economy, given the technical knowledge and quantity of inputs available.
Operating on the frontier implies that the economy is efficient.
PPF can also illustrate the general point that we are always choosing among limited opportunities.
www.geocities.com /parasu41/PPF/index.html   (689 words)

  
 Production Possibility curves
The production possibility curves is a hypothetical representation of the amount of two different goods that can be obtained by shifting resources from the production of one, to the production of the other.
The actual reasons for the shift in the production possibility curve, and the increased growth (measured as the percentage change in the gross domestic product), therefore has many causes.
The production possibility curve can be viewed as a useful tool to demonstrate the concepts of opportunity cost, and the law of increasing cost.
krypton.mnsu.edu /~renner/ppc.htm   (1488 words)

  
 Lecture 3. Aug. 28 - Ch. 3   (Site not responding. Last check: 2007-11-06)
However, it is possible with the help of simplifying assumptions to analyze this problem and gain insights and understanding of both the essential nature of the problem and characteristics of solutions to the problem.
That is, the production possibility frontier marks the boundary between those combinations of goods and services that can be produced (given the technology and available resources) and those that cannot.
Recall that we began our discussion of the production possibility frontier by considering a situation at a moment in time, with technology taken as given and the total resources available for production assumed to be fixed.
econ.la.psu.edu /~dshapiro/l03aug28.htm   (1592 words)

  
 Revision Guru
If the economy is producing at point V is can be seen that it is not producing efficiently, as it could increase production of clothing and food with the resources it already has.
The production of more and more clothing involves a growing marginal cost - ever increasing amounts of food have to be sacrificed for each additional unit of clothing produced.
It is because of increasing opportunity costs that the PPF is bowed outwards, rather than being a straight line.
www.revisionguru.co.uk /economics/ppf.htm   (398 words)

  
 Schaeffer's Investment Research Economic Basics: Production Possibility Frontier (PPF), Growth, Opportunity Cost, and ...   (Site not responding. Last check: 2007-11-06)
Under the field of macroeconomics, the production possibility frontier (PPF) represents the point at which an economy is most efficiently producing its goods and services, and therefore allocating its resources in the best way possible.
The production possibility frontier shows there are limits to production, so an economy, to achieve efficiency, must decide what combination of goods and services can be produced.
Alternatively, when the PPF shifts inwards, it indicates that the economy is shrinking as a result of a decline in its most efficient allocation of resources and optimal production capability.
www.schaeffersresearch.com /schaeffersu/basics/economics/economics2.aspx   (1475 words)

  
 Production possibility frontier: Encyclopedia II - Production possibility frontier - The marginal rate of transformation
Production possibility frontier: Encyclopedia II - Production possibility frontier - The marginal rate of transformation
Production possibility frontier - The marginal rate of transformation: Encyclopedia II - Production possibility frontier - The marginal rate of transformation
The slope of the production possibilities curve at any given point is called the marginal rate of transformation.
www.experiencefestival.com /a/Production_possibility_frontier_-_The_marginal_rate_of_transformation/id/1865766   (467 words)

  
 Production possibilities and constant opportunity costs   (Site not responding. Last check: 2007-11-06)
Production Possibility Frontier Curve can be used to illustrate the principles of absolute and comparative advantage.
Production possibilities frontier (PPF) shows various alternative combinations of two goods that a nation can produce when all of its factor inputs are used in their most efficient manner employing the most efficient technology.
Use the following information to construct production possibilities frontiers for each country, identify each country's absolute advantage, determine a barter exchange rate that would lead to mutually beneficial trade, construct the trading line for each country to reflect this barter exchange rate, and illustrate potential trade triangles for each country.
www.eco.utexas.edu /graduate/Konstantinova/i2_ConstOC.htm   (1455 words)

  
 Trade: Chapter 60-2: The Production Possibility Frontier (Fixed Proportions Case)
The production possibility frontier can be derived in the fixed proportions case by using the exogenous factor requirements to rewrite the labor and capital constraints.
The production possibility frontier is the set of output combinations which generate full employment of resources - in this case both labor and capital.
The production possibility set is the set of all output combinations that are feasible.
internationalecon.com /Trade/Tch60/T60-2.php   (412 words)

  
 Jamaica Gleaner News - Guns, butter, cricket - Monday | March 19, 2007   (Site not responding. Last check: 2007-11-06)
The production possibility frontier is a fancy term for the idea that an economy has limits: it shows, in the form of a simple diagram, that the level of production in an economy is subject to an upper limit, the frontier.
I?ve thought about the concept of the production possibility frontier recently in light of some of the criticisms that have been advanced concerning the staging of the Cricket World Cup in the West Indies.
At a very basic level, the production possibility frontier concept would tell us that if you spend a lot of money on cricket, then you will have to spend less on, say, education.
www.jamaica-gleaner.com /gleaner/20070319/cleisure/cleisure3.html   (726 words)

  
 e14.html
The implied Production Possibility Set for this individual is thus as given in Figure 14.2, and the implied production possibility frontier is the red line.
It should be noted that this production possibility frontier is concave - this is a consequence of both firms having decreasing returns to scale.
In a linear economy society's production possibility frontier is piecewise linear and concave.
www-users.york.ac.uk /~jdh1/micro2/english/html/e141.html   (1406 words)

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