The Production Possibilities

Frontier (PPF)
• PPF is a model that shows the combinations
of output that an economy can possibly
produce, given the available factors of
production and the available production
technology.

©2004 Prentice Hall Publishing Collinge/Ayers, 3/e

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 Efficient and Feasible Points

Not
Feasible
Good Y

Feasible but All points on the PPF

are efficient and feasible.
Inefficient

Good X
©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
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 The Production Possibilities
Frontier (PPF)
• PPF is a model that shows the combinations
of output that an economy can possibly
produce, given the available factors of
production and the available production
technology.

©2004 Prentice Hall Publishing Collinge/Ayers, 3/e

3
Economic Growth: increase in resources,
or technological advances
What points represent the
newly available production
Good Y

opportunities as a result of
economic growth?

Good X
©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
4
Economic Growth: increase in resources,
or technological advances

All the points between

Good Y

the two PPFs,

including the points on
the new PPF, initially
infeasible, become
available to the
economy.

Good X
©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
5
 Negative Growth: decrease in
resources, or technological setbacks
The economy loses the
points between the two
Good Y

PPFs, including the

points on the initial
PPF

Good X
©2004 Prentice Hall Publishing Collinge/Ayers, 3/e
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