• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Production possibility frontiers and economic efficiency.

  1. 1
  2. 2
  3. 3
  • Essay length: 677 words
  • Submitted: 20/10/2003
Share this essay:
AS and A Level People & Operations Management

The first 200 words of this essay...

production possibility frontiers and economic efficiency


The Production Possibilities Frontier (PPF) shows the maximal combinations of two goods that can be produced during a specific time period given fixed resources and technology and making full and efficiency use of available factor resources. A PPF is normally drawn as concave to the origin because the extra output resulting from allocating more resources to one particular good may fall. This is known as the law of diminishing returns and can occur because factor resources are not perfectly mobile between different uses, for example, re-allocating capital and labour resources from one industry to another may require re-training, added to a cost in terms of time and also the financial cost of moving resources to their new use.

An example of a conventional PPF is shown in the diagram above which shows potential output of DVD players and MP3 players from a given stock of labour and capital. Combinations of the two goods that lie within the PPF are feasible but show an output that under-utilises existing resources or where resources are being used inefficiently. Combinations of the two goods that lie on the PPF are feasible and can

Read more
The above preview is unformatted text

Found what you're looking for?

  • Start learning 29% faster today
  • Over 150,000 essays available
  • Just £6.99 a month

  • "
    I found this site very useful. It is well organized and easy to search through. For me as a student of GCSE and non-native english speaker, it makes coursework very easy and understandable.
    Asmaa, UAE. GCSE Student. Biology, Physics, Chemistry, Maths and English.
  • "
    I have used the site to find relevant essay questions for my senior students in Modern History to complete. As well as provided some essay samples to demonstrate the stucture of an historical essay.
    Yvette Agars. Senior History Teacher. Saint John's College. Whyalla S.A.

Marked by a teacher

This essay has been marked by one of our great teachers. You can read the full teachers notes when you download the essay.

Peer reviewed

This essay has been reviewed by one of our specialist student essay reviewing squad. Read the full review on the essay page.

Peer reviewed

This essay has been reviewed by one of our specialist student essay reviewing squad. Read the full review under the essay preview on this page.