Friday, 13 May 2016

PPF Curve -Microeconomics

PPF Curve

So today we will be talking about the PPF curve and the economics theory behind it.
If you miss the first economics post of this series of posts click here->  how markets work?

So what are PPF curves?

PPF curve- Well PPF curve stands for production possibility frontier which in essence show the maximum productive potentials of an economy using two goods or services when working at full capacity.
The PPF curve can also show the opportunity cost of using scarce resources.
For example if the scarce resource is milk, then there is a trade-off between producing cheese or yoghurt from the milk. The PPF curve can show this like in the diagram below.

That's all for today guys. Hope that the information was helpful regardless of the posts size. If you missed our last post on Scarcity, click here -> Scarcity

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