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The production-possibility frontier can be constructed from the contract curve in an Edgeworth production box diagram of factor intensity. [12] The example used above (which demonstrates increasing opportunity costs, with a curve concave to the origin) is the most common form of PPF. [ 13 ]
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
Figure 6: Production possibilities set in the Robinson Crusoe economy with two commodities. The boundary of the production possibilities set is known as the production-possibility frontier (PPF). [9] This curve measures the feasible outputs that Crusoe can produce, with a fixed technological constraint and given amount of resources.
English: A production possibility frontier showing opportunity costs of moving between two of the points. Date: 6 January 2010, 12:29 (UTC) Source:
The production–possibility frontier (PPF) is an expository figure for representing scarcity, cost, and efficiency. In the simplest case, an economy can produce just two goods (say "guns" and "butter"). The PPF is a table or graph (as at the right) that shows the different quantity combinations of the two goods producible with a given ...
Productive inefficiency, with the economy operating below its production possibilities frontier, can occur because the productive inputs physical capital and labor are underutilized—that is, some capital or labor is left sitting idle—or because these inputs are allocated in inappropriate combinations to the different industries that use them.
This image is a derivative work of the following images: File:PPF_opportunity_cost.svg licensed with Cc-by-sa-3.0 . 2010-01-06T12:30:03Z Jarry1250 480x490 (15784 Bytes) {{Information |Description={{en|A [[:en:production possibility frontier|production possibility frontier]] showing [[:en:opportunity costs|opportunity costs]] of moving between two of the points.}} |Source=*[[:File:Ppf2_small.
Point X is unobtainable given the current "budget" constraints on production. A production-possibility frontier is a constraint in some ways analogous to a budget constraint, showing limitations on a country's production of multiple goods based on the limitation of available factors of production.