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This short lecture decribes in detail about the Production Posibility Curve (PPC) in Economics with Examples and diagram of Opportunity cost & the production possibilities curve, Production Possibility Frontier (PPF) in Principles of Economics.
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Production possibility frontier PPF also called production possibility curve PPC is A graph that shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently.
All points below and to the left of the curve (production possibility frontier) represent combinations of Beer and Wine that are possible for the society given the resources available and existing technology.
Although an economy may be operating with full employment of its land, labor, and capital resources, it may still be operating inside its ppf (production possibility frontier), at a point such as A. The economy could be using those resources inefficiently.
Periods of unemployment also correspond to points inside the ppf (production possibility frontier), such as point A.
Moving onto the frontier like point B means achieving full employment of resources.
Points above and to the right of the curve, such as point C, represent combinations that cannot be reached.
If an economy were to end up at point A on the graph, it would be producing no consumer goods at all; all resources would be used for the production of capital. If an economy were to end up at point B, it would produce only consumer goods.
The ppf illustrates a number of economic concepts. One of the most important is opportunity cost. The opportunity cost of producing more Beer is fewer Wine.
0:00 PPF Production Possibility Frontier
3:00 Opportunity cost on the PPF
#productionpossibilityfrontier #ppfexplained#ppcexplained #economics
Hi everyone! In this video I demonstrate drawing a joint Production Possibility Frontier (or sometimes PPC) which includes a kink.
Please see the related video on calculating opportunity cost: https://youtu.be/OAs8K38VEZA
I hope that the video helps your study!
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In a previous lesson we introduced the basic economic concepts of scarcity, opportunity cost, and the production possibilities curve (PPC). In that lesson, we examined the tradeoffs an individual faces in the use of her time between “work” and “play”. We showed that the opportunity cost of one hour of work is always the one hour of play that the individual could have enjoyed instead.
The constant opportunitiy cost between work and play is illustrated in the PPC model as a straight line production possibilities curve. In this lesson, we will expand our understanding of the PPC and opportunity costs by examining the tradeoff a nation faces between the production of two goods using its scarce resources. Cars and pizzas require very different resources to produce, and therefore, as the production of one good increases, the opportunity cost of its production in terms of the other good increases.
The result is a PPC that is bowed outwards from the origin. When choosing between the production of two goods, the more similar the resources needed to produce each good, the straighter the PPC will be. The less similar the resources needed to produce each good, the further the PPC will be bowed out from the origin.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870
In this movie we go over how to draw a PPF (production possibilities frontier) given information on various points from a table. The trick here is to take all of the information from the table and plot it value for value on the graph. This will give you a PPF also sometimes called a PPC (production possibilities curve) that shows all different possible combinations of goods/services that are possible with the given inputs.
More information is available at: http://www.freeeconhelp.com/2011/06/how-to-draw-ppf-production-possibility.html where more information including a description and images are kept.
Why is the Production Possibility Curve (PPC) or Production Possibility Frontier (PPF) concave? What does increasing opportunity costs mean? When we increase production, why does it seem that we have to sacrifice more and more resources? What are the limitations to this economic model?
In addition, how does this PPC model illustrates the concept of opportunity cost? In what way does it show that resources are limited? Where are the points that show under-utilization of resources, full utilization of resources? Where is productive efficiency achieved? Can there be more than 1 productively efficient point? What is the difference between productive efficiency and allocative efficiency?
Assumptions to this model:
We assume that there are only two types of goods produced in this economy.
We also assume that technology does not change.
This economic model is no doubt an oversimplification of how the real world works. So what are the implications?
Hello,
I have explained about ppf ( production possibility frontier) in this video in an easy way,
Production possibility curve is a curve which shows all possibilities of two commodities which can be produced by allocating resources differently.
When resources, technology, remains constant
To understand it better watch full video
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Introduction of PPC…
Assumptions and explanation…
Shift and rotation of PPC….
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opportunity cost
The basic economic problem is one rooted in both the natural world and in human greed. We live in a world of limited resources, but we seem to have unlimited wants. This results in scarcity, which gives rise to the very field of Economics, which deals with how to allocate scarce resources between the competing wants and needs of society.
This lesson will introduce these basic economic concepts, along with the first (and perhaps the most useful) graph an Economics student will learn, the Production Possibilities Curve.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870
