Use a two-good model of a production possibility frontier (PPF) to discuss the concepts of

The Economic Concepts in the Production Possibilities Frontier

It is true that scarcity of resources prompts man to study and explore all kinds of possibilities to maximize production in a certain given period of time . In a given economy of two goods , there is an established model that explains the relationships of production efficiency and inefficiency . And in a given example of two kinds of products , there is a corresponding trade-off in order to attain a desired production performance in a given economy

In economics , the production possibilities frontier (PPF ) is a

graph that illustrates the possible alternative combinations of two goods that can be produced in a certain period of time under the conditions of a given state of technology and fully employed resources (Arnold , 2008 This definition can be explained best by using concrete samples and illustrations . But before discussing the details of the first example if an economy produces two goods , four assumptions must be drawn using a static model (1 ) the resources of this economy consist only of labor and capital (2 ) the labor and capital is available and given (3 ) this economy produces two goods (4 ) the technology for production is given (Dwivedi , 2002

In the illustrated example of Dwivedi (2002 , the two goods are food and clothing . In Table 1 , the production possibilities for these goods are shown . The alternative A shows that the production is seven thousand tons of food and 0 million meters of clothing , while alternative B shows that production is...