Production Possibility Frontier

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Production Possibility Frontier

A graphical representation of the possible outputs using two or more inputs assuming that all inputs are used efficiently. For example, if one wishes to determine the most efficient use of raw material and labor to make as much of a product as it efficient, one may design a PPF that would show all possible production outputs, which is shown as a curve. One would then find the most efficient point on a curve and use resources accordingly.
References in periodicals archive ?
Key words: benchmarking, production possibility frontiers, efficiency/inefficiency measurement, J-Curve of adoption of innovations, convergence.
In the early literature on production possibility frontiers (see, for example, AIGNER & CHU, 1968; AFRIAT, 1972), it was assumed that the leader of a sample was always reaching the boundary of the frontier.
Germany, France, the UK and the Netherlands is analysed by using a stochastic production possibility frontier approach.

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