P - P.P.F. graph: Figure 1 illustrates the Production...

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Unformatted text preview: P.P.F. graph: Figure 1 illustrates the Production Possibility curve. It is strictly based on the information given by the schedule. The units of X have been measured along the horizontal (x) axis and those of Y along the vertical (y) axis. The six points a to f are then the result of mapping out the values of varying combinations of the two goods in the schedule. On joining these points we obtain a continuous curve which is known as the P.P.F. curve, since each point on the P.P.F. represents maximum producible units of X and Y with the given quantities of resources. It is also known as a transformation curve since the resources are transformed into varying units of the two goods. Note that all points on the P.P.F. are efficient, in the sense, all available resources have been utilized fully and efficiently. Any point such as g inside the curve is inefficient and hence utilized fully and efficiently....
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This note was uploaded on 12/28/2011 for the course ECO 101 taught by Professor Staff during the Fall '10 term at Texas State.

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