Production possibility curve is the curve that show the combination of two item or services that can be produce in the market in a certain amount of time provided that all other eternal factor that can effect the curve are kept constant such as, labour, technology land and capital.
The production possibilities curve (PPC) is a graph that shows the different quantities of the two goods (in this case, maize and shirts) that an economy (Botswana) could efficiently produce with the limited productive resources.
Production-possibility frontier In economics, a production-possibility frontier (PPF) or “transformation curve” is a graph that shows the different quantities of two goods that an economy (or agent) could efficiently produce with limited productive resources.The production possibility curve (PPC) shows all the combinations of two goods that an economy can produce with a given set of resources. The line is limited by four production factors -. land which is classified as all of the natural resources available. labour, which is the human workforce.Production Possibilities Production possibilities frontier (PPF) or more commonly known as transformation curve is a graph that demonstrates the difference between two goods that an economy with scarce resources could produce. There are two primary determinants that may greatly affect the orientation of the PPF of a nation.
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The graph below shows an example of the production possibility curve. This the simplest example of the concept and as a result is a straight line, not a curve:. The two goods being produced here are food and drink. Point A portrays a situation in which all of the resources involved in the production in the goods are geared towards drink, and.
On the other hand, the Production Possibility Curve (PPC), also known as the Production Possibility Frontier or Boundary or the Transformation Curve shows the maximum combinations of two goods that a country can produce, with its given resources and at a given level of technology.
PPCs help to investigate the problems of growth and development also. In Figure 1.4, let FF be the production possibility curve for the year, say 2002 and let F’F’ be that for the year 2003. Since F’F’ is above FF at all levels of output of the two goods, it signifies growth of national product. Growth in this figure is uniform for both.
The inter-temporal relative supply curves for Home and Foreign reflect how Home’s production possibilities are biased toward present consumption whereas Foreign’s production possibilities are biased toward future consumption. In other words, Foreign’s relative supply for future consumption is shifted out relative to Home’s relative supply.
Essay 2 Explain how microeconomic and macroeconomic issues may be represented using production possibility curves Production possibility curve is a curve thats shows the various possible combinations of two goods a country can produce if all its resources are fully utilized. MIcroeconomics is the analysis of the decisions made by individuals and groups, the factors that affect those decisions.
Each point on the production possibilities curves represents some maximum satisfaction or outcome of two products. The graph shows that the customers must either choose which product suits their desires. More cars means less food and vice versa. This will therefore indicate that the total supplies of resources are limited, thus the total amounts of cars and food that our economy is capable of.
The Background Of Production Possibility Curve Economics Essay. No it cannot produce 150 tons of potatoes and 50 tons of wheat because it is outside of the PPC which means that it cannot be produced with the current resources. The opportunity costs form increasing 140 tons of potatoes to 190 tons per year is 50tons of potatoes extra however there will be a loss of 30 tons of wheat per year.
Submission Date: 02-08-2014 ANSWERS 1) A- A production possibility frontier (PPF) is a curve or a state line which shows the Combinations Of two or more goods and services that can be produced at the one time by Using all of Resources efficiently of the available factor (Geoff Riley,2012).
The Production possibility frontier analyses the most efficient use of company resources to achieve different levels of production of output. Labour is one of the variables factors of production. One unique feature of the PPF is that one alternative is usually foregone in order to maximize the production of another product, for example, in a refinery a manager may decide to deploy more human.
This may be clearly presented with the production possibility frontier by comparing the curves of a past or present economy to a resent or future economy. This may be seen in Fig 1. Where the curve is stretched outwards and the potential production rate is increased. For example point C on the line ABA producing 150 units of wheat and 40 units of cars will be shifted to point F, producing 200.