Production Possibility Frontier; with graphical explanation

Definition: "A production possibility frontier is a curve which shows various combinations of set of two goods which can be produced with the given or available resources"

Mains feather Of Production Possibility Frontier:

• Fixed quantity of resources.
• Produce only two goods.
• Resources can be used interchangeable.

Let to understand it better with an example, the production of computers and mobile phones.

Table: Schedule For Computers And Mobile Phones.

Production	A	B	C	D	E
Computers	0	100	200	300	400
Mobile Phones	800	600	400	200	0
economicsgallery.blogspot.com

The production possibility frontier can be shown graphically and the maximum output levels are indicated by a line known as the production possibility frontier. The frontier shows the maximum efficient level of output combinations that are available to this economy with a finite level of resources. It also allows us to measure the opportunity cost of any economic decision. We place computers on the vertical axis and mobile on the horizontal axis.

Graph For Production Possibility Frontier.


Given our assumptions, point such as Z are impossible with fixed resources and factor of production. Point Z shows a production possibility of 600 mobiles and three computers which is impossible within the available resources However, if we were to produce 600 mobiles phones and within limited resources we could only produce a maximum of 100 computers.

Simply, the points which are located above the curve are impossible to attain while the points which are located below the curve, are possible to attain.