1.3.2 Production Possibility Frontier (PPF) Model
Completion requirements
The relationship between the production output of one commodity and the production output of another is the Production Possibility Frontier (PPF).
When we compare the production of two commodities in an economy with scarce resources, the PPF model shows that we must produce less of one thing to produce more of another. The images below illustrate the production of corn and wheat on one hectare of land. As wheat production increases, corn production decreases.
When we compare the production of two commodities in an economy with scarce resources, the PPF model shows that we must produce less of one thing to produce more of another. The images below illustrate the production of corn and wheat on one hectare of land. As wheat production increases, corn production decreases.