Answer to Question #299220 in Microeconomics for sithole

Question

Use the production possibility frontier (PPF) to illustrate and explain the scarcity, choice

and opportunity cost of a farmer who is producing maize and sorghum. Use your own

values.

Answer 1

Production Possibility Frontier

A production Possibility Frontier(PPF) graph shows the Production Possibility Curve(PPC), that indicates a model for trade off by resource allocation in the production of two different goods.

Given commodities maize and sorghum, the Production Possibility Curve represents the maximum amounts of quantity achievable in production by maximum utilization of the available resources. This can be noted to illustrate the concept of choice. Shape of the PPC on the other hand illustrates whether the opportunity cost derived from the choices made increases, or remains constant. Making a choice due to the limitation of resources available better show the aspect of scarcity.

Figure 1 above, illustrates PPC with an increasing opportunity cost. Opportunity cost can be termed as the slope of the PPC, seen to increase with increase in output of commodities.

Figure 2 shows the same PPC in figure 1, buit this time with a growth in economy where resource available for the utilization in production increase.