Production Possibilities Frontier (PPF)
Definition
The production possibilities frontier is an economic model that shows the different combinations of two goods that an economy can produce efficiently at full employment.
Analogy
Picture yourself at an ice cream shop where you have only two flavors left - chocolate and vanilla. The production possibilities frontier would show all the different combinations of chocolate and vanilla scoops they can make using their available ingredients.
Related terms
Economic growth: An increase in an economy's ability to produce goods and services over time.
Scarcity: Limited availability of resources relative to unlimited wants and needs.
Specialization: Focusing on producing a specific good or service in which one has a comparative advantage.
"Production Possibilities Frontier (PPF)" appears in:
Additional resources (1)
Are you a college student?
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.