StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Essay example - Production Possibility Frontier

Only on StudentShare
College
Essay
Miscellaneous
Pages 2 (502 words)
In economics, a Production Possibility Frontier or "transformation curve" is a graph that shows the different quantities of two goods that an economy could efficiently produce with limited productive resources. Points along the curve describe the trade-off between the two goods, that is, the opportunity cost…

Extract of sample


As indicated on the chart above, points A, B, and C represent the points at which production of Good A and Good B is most efficient. Point X demonstrates the point at which resources are not being used efficiently in the production of both goods, and point Y demonstrates an output that is not attainable with the given inputs (Investopedia, 2000)
Production Possibility Frontier assumes that all possibilities are fixed, however over time it may shift in or out depending on the economic situation. Economic growth pertaining to discovery of new resources, improvement of technology, and capital accumulation results to outward shift. On the other hand, inward shift may occur when there is a decrease in supplies and production possibility or deficient technology and resources.
Inward shift indicates that the economy is shrinking. In that sense, any burden in the economy such as unemployment, destruction of capital goods, and disturbance in people's lives may lead to such shift. For example, the 1973 oil crisis shocked the Japanese economy which was heavily depended on oil, thereby shifting Japan's PPF inward (Post war). Post war has caused great deal of damage, human and physical capital wise, of which had decreased the production possibility.
A PPF is normally drawn as concave to the origin because the extra output resulting from allocating more resources to one particular good ...
Download paper
Not exactly what you need?

Related papers

What causes conflict along the nomadsedentary frontier?
Nomadism for Pastoralists is apolitical as well as an economic strategy. Nomads use their nomadic movements to maintain household autonomy, to evade domination by other members of their own communities as well as by outsiders, including state authorities.From ancient times the contrast between nomadic and sedentary ways life has been a recurring theme. It is said in the earliest pages of Bible,…
9 pages (2259 words)
Microeconomics: output
(Rubinfield and Pindyck, 2005)…
7 pages (1757 words)
Pro-seminar on the Frontier of Islam
Introduction …
5 pages (1255 words)
The American Frontier and the Western Hero
He is a real hero who possesses the features of an ideal man, and personifies high moral values and physical strength. Wister depicts the Virginian as a person who is able to distinguish what is good and what is bad, and who follows his personal beliefs. He is described as: "The dealer had styled the Virginian "a black-headed guy." This did well enough as an unflattered portrait" (Wister, 34). The…
2 pages (502 words)
Unemployment
The growth of a country is deeply connected to the number of people employed in that country. When there will be unemployment in a country people will not be in a position to deal with day-to-day expenses. This will give rise to economic instability.Actually, when employment starts to create problems, no one but government can handle it in the right way. Now, before throwing some light on the…
6 pages (1506 words)
Development of Rural Economy
Economic growth is believed to be evenly distributed when it helps both the rural and urban areas of a country. In this, the economy of USA is taken as model for development that could be used by Australia and Iraq to develop their rural side. It is believed that although Australia and Iraq are among the richest nations of the world but they have failed to develop their rural areas and there is…
33 pages (8283 words)