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.

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production possibility boundary

References in periodicals archive ?

Then, in a second stage, we should learn how to derive the "utility frontier," which is the envelope of all utility possibility curves and corresponds to total Pareto efficiency as we move on the production possibility frontier with all ratios equalized in production, in consumption, and between consumption and production.

Social welfare state intervention, and value judgments

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.

Benchmarking efficiency of telecommunication industries in the U.S. and major European countries: a stochastic possibility frontiers approach