Answer to Question #298262 in Microeconomics for garg

Question

Define production possibility frontier (PPF)? Why is the PPF concave to origin? Do all

the points on the PPF represent efficient level of output? Explain.

Answer 1

A PPF is a curve that shows the varying amounts of two products that can be produced while they depends on same resources.

It is concave because if the Production of one of the products is to increase, the Production of the other product has to decrease as they depend on the same resources.

All the points in a PPF represents an effective Production as they show maximum combinations of output that can be produced when all resources are effectively employed.