The PPF assumes that all inputs are used efficiently.
In the long run, if technology improves or if the supply of factors of production increases, the economy's capacity to produce both goods increases; if this potential is realized, economic growth occurs.
The production-possibility frontier can be constructed from the contract curve in an Edgeworth production box diagram of factor intensity.
In the diagram on the right, producing 10 more packets of butter, at a low level of butter production, costs the loss of 5 guns (shown as a movement from A to B ).5 6 Furthermore, the production model can be generalised using higher-dimensional techniques such as Principal Component Analysis (PCA) and others.The Review of Economic Studies, Vol.References edit Nicholson, Walter (2005).Coelli, learn photoshop elements 7 dvd Time; Prasada Rao,.South Africa: Pearson Education.
"Summary on Factor-Price Equalization".Homewood, Illinois: Richard.But, opportunity cost usually will vary depending on the start and end points.Understanding the Pareto Efficiency, the.14 Position edit An unbiased expansion in a PPF The two main determinants of the position of the PPF at any given time are the state of technology and management expertise (which are reflected in the available production functions ) and the available quantities.International Economic Review, Vol.