answersLogoWhite

0

An increase in resources, such as a growth in the labor supply or in the capital stock, shifts the frontier outward.

User Avatar

Wiki User

13y ago

What else can I help you with?

Continue Learning about Economics

What effect does it make if resources increase in Production Possibilty Frontier?

The effect of increased resources in a production possibility frontier, or PPF, is an imbalance in the graph. Since a PPF is created based on set production factors, the results of the graph would be skewed with an increase in resources unless other production factors were increased accordingly.


Why does the production possibility frontier shift outwards?

A PPF will shift out if we have improvements/increases in resources and/or technology. You would see an unbiased increase (the slop of the PPF stays the same) when R+T increase in the production of both goods. You would see a biased increase (the PPF pivots around one pt) when R+T increases in the production of only one of the goods.


Why in a production possibilities frontier model a point inside the frontier is attainable?

A PPF is the locus of points such that all the economy's resources are used to its fullest potential. A PPF is concave to the origin because of the increasing opportunity cost to produce an additional unit of x (on the horizontal axes). A point inside the PPF is attainable because (1) there may be no full employment or (2) inspite of full employment they are used to less potential. On the contrary a point outside the PPF is not attainable because the PPF itself is the locus of the maximum attainable output given resources, the PPF may however expand due to increase in resources or their efficiency.


What is it called when a PPF is shifted to the right?

This trend shows "The growing economy".When a PPF is shifted to the right,it means the capacity of production is increased by improvement in technology,discovery of new resources or some other factors.


What is the relationship between opportunity cost and the production possibilities frontier (PPF)?

Opportunity cost is the value of the next best alternative foregone when a choice is made. The production possibilities frontier (PPF) shows the maximum possible combinations of goods that can be produced with given resources. The relationship between opportunity cost and the PPF is that as you move along the PPF and produce more of one good, the opportunity cost of producing that good increases because resources are being shifted away from producing other goods.

Related Questions

What effect does it make if resources increase in Production Possibilty Frontier?

The effect of increased resources in a production possibility frontier, or PPF, is an imbalance in the graph. Since a PPF is created based on set production factors, the results of the graph would be skewed with an increase in resources unless other production factors were increased accordingly.


Why does the production possibility frontier shift outwards?

A PPF will shift out if we have improvements/increases in resources and/or technology. You would see an unbiased increase (the slop of the PPF stays the same) when R+T increase in the production of both goods. You would see a biased increase (the PPF pivots around one pt) when R+T increases in the production of only one of the goods.


Why in a production possibilities frontier model a point inside the frontier is attainable?

A PPF is the locus of points such that all the economy's resources are used to its fullest potential. A PPF is concave to the origin because of the increasing opportunity cost to produce an additional unit of x (on the horizontal axes). A point inside the PPF is attainable because (1) there may be no full employment or (2) inspite of full employment they are used to less potential. On the contrary a point outside the PPF is not attainable because the PPF itself is the locus of the maximum attainable output given resources, the PPF may however expand due to increase in resources or their efficiency.


How is efficiency attained in the ppf?

Efficiency on a production possibility frontier (PPF) occurs when resources are allocated to their most productive use. This means that all available resources are utilized fully and there is no waste. Any point on the PPF represents an efficient allocation of resources because it shows the maximum possible output that can be produced with the given resources.


Production Possibility Frontier - PPF between health and entertainment?

ppf shows all the maximum output combination of two products when an economy allocates all its available resources efficiently. An increases in the funds used in healthcare would reduce the funds that would have been used to increase the entertainment sector.


What are the attainable region and unattainable region in the ppf?

The attainable region in a production possibilities frontier (PPF) represents all the combinations of goods or services that can be produced using available resources and technology. The unattainable region represents combinations that cannot be produced given current constraints. Any point inside the PPF is efficient, while points outside the PPF are unattainable without increasing available resources or improving technology.


What is it called when a PPF is shifted to the right?

This trend shows "The growing economy".When a PPF is shifted to the right,it means the capacity of production is increased by improvement in technology,discovery of new resources or some other factors.


What is the relationship between opportunity cost and the production possibilities frontier (PPF)?

Opportunity cost is the value of the next best alternative foregone when a choice is made. The production possibilities frontier (PPF) shows the maximum possible combinations of goods that can be produced with given resources. The relationship between opportunity cost and the PPF is that as you move along the PPF and produce more of one good, the opportunity cost of producing that good increases because resources are being shifted away from producing other goods.


3 factors that will cause the ppf to shift outwards?

Three Factoors that can cause the ppf to shift outwards are 1. Economic growth 2. Technological progress 3. increase in physical capital or labour


What happens if you waste?

Resources will decrease while at the same time rot and disease will increase.


Why is PPF negatively sloped?

why PPF in economics is negatively sloped


When was PPF - company - created?

PPF - company - was created in 1991.