Summary
Summary Production Possibility Frontier Principle
- Institution
- University Of South Africa (Unisa)
Production Possibility Curve Definition Explain the relationship between scarcity and production possibility frontier. Conclusion
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Production Possibility Frontier.The "production possibility frontier" (Parkin, 2019, p. 70) is the curve that
shows the combinations of goods and services that are achievable and
those that are feasible.
The production possibility curve graphically describes and illustrates the
concepts of scarcity, choice, and opportunity cost by showing the
combinations of any two goods or services that are feasible given the
productive use of local resources (Economics for South African Students,
Philip Mohr, Fifth Edition). The production possibilities frontier shows the
problems of resource scarcity, choices, and opportunity costs as a result
of the limited factors of production or resources. As a result, choices must
be made.
The PPF is a critical pointer in economics that shows when an economy
reaches its productivity level by producing what is best for itself and
exchanging with other countries for other products, according to
Investopedia, November 7, 2021.
The production possibility frontier is a pointer that shows the nation the
potential level of production that can be created with limited available
resources and fixed production capabilities.
As such, the production possibility frontier shows the relationship between
choice, scarcity, and opportunity cost as represented by the production
possibility curve, which consists of all combinations of any two products
or services that are attainable if all resources are fully and efficiently
employed.
The mix is represented graphically in a production possibility curve, which
shows the potential level of production in an economy with limited
resources and fixed production capabilities. A similar diagram shows the
mix of the two goods a country could supply: the area with deficits and the
area that is unattainable.
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