What Is a Production-Possibility Frontier?

Production possibility boundary, in English is production-possibility frontier, referred to as PPF (or production-possibility boundary). It is used to indicate the combination of the maximum number of various commodities that can be produced by the economy and society under the given resources and technological conditions, reflecting the economic characteristics of resource scarcity and selectivity. It is usually a comparison of the production possibilities of the two commodities. The graph shown on the coordinate axis is the production possibility curve, which can also be called the conversion line. ^[1]

Production possibility boundary

It is mainly used to examine how a country should allocate its relatively scarce production resources. The production possibility boundary is used to describe and describe the maximum output combination curve that can be achieved under certain resources and technical conditions. It can be used to select various production combinations.

Probability boundaries can also be used to illustrate potential and excessive issues.

Explain that the price of choice is

(1) Both the commodity market and the factor market

The boundary of production possibility can clarify some basic economic thoughts. Suppose that our economy only produces cars and computers. They use all the factors of production in the economy. The boundary of production possibility is a graphic that shows At the same time, various combinations of the number of products that an economy can produce also indicate the trade-offs of producing different goods at a certain period, but this trade-off may change over time.