The Production Possibilities Frontier curve

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The Production Possibilities Frontier curve

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The Production Possibilities Frontier is a graph used to compare two input factors of production. These products have to be used in terms of rates and it is from the same aspect that the production set is bounded.  The curve can be used to show economic choices a given country would have to make whenever scarce resources are available for production. The country in this case has to depict methods of production that would minimize on production costs and maximize on the production output. In production, there has to be a consideration of the available inputs, and the technological factors that prevail. This paper is based on the decision-making process in producing food and clothing by a developing country.

In developing countries, resources are scarce and the use of technology is less superior to the technology in the developed countries. In a developing country that specializes in producing food and clothing at a maximized capacity, the issue of scarcity can greatly influence decision made about what has to be produced between clothing and food. The way to produce them is also influenced including the consumer targeted for the product by the developing country (Gillespie, 2007).

The first thing the country has to consider is the availability of resources based on the two sides of production. The decision to produce would be based on what resources are available cheaply, the kind of technology needed for each type of product, and the labor intensity or human capital to be used. (Farrell, 1957) In this case, the PPF curve and concept can be used to establish which side of production has more economic resources and where economic efficiency would be maximized. In doing this, the opportunity cost of producing food in the expense of producing clothing is gauged.

The country is assumed to be capable of producing both food and clothing simultaneously. From this aspect or assumption, the marginal rate of transformation would be determined as the opportunity cost of producing food is established. Another issue would be the enhancement of production efficiency that comes from improved allocation efficiency as well as economies of scale. The country can target on allocating its resources to the production of food since developing countries have vast land that is underutilized. The market for agricultural food products is broad and ranges from local mark.............


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