Presentation on Production Possibility Frontier Curve
Contents - Characteristics of Production Possibility Frontier Curve, Efficiency and Opportunity cost using production possibility frontier Curve
Created by Rokhsana Rahim Rumki
Department of Biotechnology and Genetic Engineering
Jahangirnagar University, Bangladesh
2. Presented By
Rokhsana Rahim Rumki
2
Roll:1610
Biotechnology and Genetic Engineering
Jahangirnagar University, Bangladesh
3. What is Production Possibility Frontier Curve?
Characteristics of PPFC
Why PPFC is bow shaped?
What is Opportunity cost?
PPFC curve shape according to opportunity cost
types
Efficiency from PPFC
What happens to PPFC when technological
advancement occurs?
CONTENTS
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4. What is PPFC?
Illustrates the variations in
the amounts that can be
produced of two products if
both depend upon the same
finite resource for their
manufacture
From Nation’s Perspective
Demonstrates the point
that any nation’s economy
reaches its greatest level of
efficiency
From Industry Perspective
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5. Efficiency from PPFC
Points D, E
Inefficient
Combination -
underutilized
Point F
Unattainable
Point A,B,C
Efficient output
combination
lying on the PPF
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7. Why PPFC is Bow
Shaped?
Because, some resources are suited toone product than otherDue to the increasing law of opportunity
cost
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8. Opportunity
COST
● Loss of other alternatives● When other alternative has been chosen● Value of Trade off
Value of Trade Off
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9. 3 types of Opportunity Cost from PPFC
Decreasing
if marginal opportunity
cost decreases then PPC
will be convex to the
origin owing to
decreasing slope
Constant
when the opportunity
cost of a good remains
constant as output of the
good increases
Increasing
when the opportunity
cost of a good increases
as output of the good
increases
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10. Economic Growth from PPFC
● New Technology
● New production method
● New Raw materials
● Increase in labor force
Outward Shift
● Resources run out
● Natural disaster
● Failure to invest
● Erosion of infrastructure
Inward Shift
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11. What happens when technological advancement occurs?
● Shifts the PPFC
rightward
● Less costly inputs are
needed
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