Production possibilities frontier
Download
1 / 7

Production Possibilities Frontier - PowerPoint PPT Presentation


  • 1053 Views
  • Updated On :

Production Possibilities Frontier. Consumer Goods. Production Possibilities Frontier (PPF) shows all possible combinations of two products (Consumer Goods and Capital Goods) that a country can produce with available technology and full employment of all resources. PPF. 0. Capital Goods.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Production Possibilities Frontier' - Michelle


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Production possibilities frontier l.jpg
Production Possibilities Frontier

Consumer Goods

Production Possibilities Frontier (PPF) shows all possible combinations of two products (Consumer Goods and Capital Goods) that a country can produce with available technology and full employment of all resources.

PPF

0

Capital Goods



A production possibility frontier l.jpg
A Production Possibility Frontier

Suppose that the production possibility frontier can be represented by

To find the slope, we can solve for Y

If we differentiate


A production possibility frontier4 l.jpg
A Production Possibility Frontier

When X=5, Y=13.2, the slope= -2(5)/13.2= -.76

When X=10, Y=5, the slope= -2(10)/5= -4

The slope rises as X rises.


Indifference curves l.jpg

Indifference Curves

An Indifference Curve represents all combinations of market baskets that provide a consumer with the same level of satisfaction.


Characteristics of indifference curves l.jpg
Characteristics of Indifference Curves

  • Indifference curves are continuous and every- where dense;

  • Indifference curves slope downward to the right; and

  • Indifference curves do not intersect;

C

U2

U1

K

0


General equilibrium l.jpg
General Equilibrium

C

E

CE

U

PPF

K

O

KE


ad