How Do I Find The Production Point On A Ppf (ppc) Curve?
PPC May 31st, 2009I have a graph- a PPF curve- and I have a question asking me to find the production point on the graph. Where is the Production point, and how do I find it?
I have a graph- a PPF curve- and I have a question asking me to find the production point on the graph. Where is the Production point, and how do I find it?
May 31st, 2009 at 10:17 am
you need to have two items that you intend to manufacture, graph one on the horizontal axis, the other on the vertical axis. For example, Tanks and guns are the two products you intend to produce. As you produce more of one and less of another, you should be on the PPF line (bowed out). As you produce less of one and more of another, your seeing what people refer to as “opportunity cost.” Basically what you gain AND give up to produce more of one and less of another. The PPF has three areas. 1) Beyond PPF: means technology and or resources are not available to to produce to that point yet. A good example is old phones and cell phones. In the early 70′s dial phones were possible by technology, but new technology in the 90′s helped propel cell phones to become the new rage on a mass level. 2) On the PPF: implies all resources are being used efficiently. 3) Inside the PPF: represents inefficiency.
May 31st, 2009 at 10:17 am
The production point in a PPF is anywhere inside up to the curve. Anypoint outside PPF is not feasible to produce. However, if you will consider the production constraint (basicall two factors of production labor and capital), production is maximized when the production constraint touches the PPF curve.
May 31st, 2009 at 10:17 am
more info needed.
May 31st, 2009 at 10:17 am
You must have some other information besides the PPF like, for example, the opportunity costs of both goods. Without any other information it’s impossible to find that point. Anyway, what I do know is that the production point will necessarily by ON the frontier.
Let’s say you do have the opportunity cost of one good relative to the other. All you have to do is draw a line on the graph that represents such a cost and the production point will be where this line is tangent to the PPF.