PPF

• Production possibility frontiers or production possibility curves are useful tools to illustrate the ideas of scarcity and choice in economics.
• On a micro level, a production possibility frontier (PPF) shows the maximum possible production of two goods or services that can be produced with a given level of factors of production.
• A production possibility frontier also illustrates the various combinations of two goods and services that can be produced with a given level of factors of production.
• On a macro ppf, the labels on the access to goods and services are changed to indicate the entire economy.
• A 10 unit increase in tablets each time results in more units of laptops being given up, illustrating the law of increasing opportunity cost.
• A linear ppf curve illustrates constant opportunity cost, meaning the opportunity cost of goods given up remains the same regardless of the increase in services.
• A concave ppf curve indicates the law of increasing opportunity cost, meaning the more that is produced of one good, the more of the other good has to be given up.
• A macro production possibility frontier (PPF) shows the maximum possible production of all goods and services that can be produced with the level of factors of production in the economy.
• A macro production possibility frontier also illustrates the various combinations of all goods and services that can be produced with given factors of production in the economy.
• The shape of a production possibility frontier can indicate the opportunity cost of producing goods and services.
• A production possibility frontier can show how production can be increased of goods and services.
• Production can be increased on a PPF by using factors of production better, rearranging factors of production, or increasing factors of production.
• Pareto efficiency on a PPF is the idea that nobody can be made better off without making somebody else worse off.
• Productive efficiency on a PPF is achieved by using up all factors of production to their maximum level, resulting in maximum production from all factors of production available.
• Efficiency on PPFs can be categorized into three types: productive efficiency, allocative efficiency, and pareto efficiency.
• Any point on the PPF is pareto efficient.
• Any point on the curve in a PPF is productively efficient, while any point within the curve is productively inefficient.
• Allocative efficiency on a PPF is whether what's being produced is satisfying consumer demand.
• Productive efficiency on a linear PPF illustrates constant opportunity cost, while a concave PPF represents increasing opportunity cost.
• Shifting the production possibility frontier (PPF) curve involves moving along the curve to favor tablet production by reallocating factors of production.
• Increasing the quantity of land, if that's an option, can mean more crops can be produced.
• Reallocating factors of production involves moving factors of production away from producing laptops to an extent and towards producing tablets instead.
• The PPF curve can shift favoring the production of one good over the other, indicating a change in the quantity and/or quality of factors of production that purely suit the production of one good over the other.
• Increasing the quantity and/or quality of factors of production, such as labor, capital, enterprise land, and labor, allows the PPF curve to shift.
• Allocating the use of their factors of production allows businesses to re-employ factors of production towards specializing more in tablet production.
• The quantity and quality of factors of production can be increased by hiring more workers, training them better, increasing the productivity of labor, bringing in more machinery, or improving the quality of capital.