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You are here: Home / Potpourri / Economics 101: The Production Possibilities Frontier

Economics 101: The Production Possibilities Frontier

Economics 101: The Production Possibilities Frontier

[This is part of the series: The Complete Guide To Economics 101.]

What is the production possibilities frontier?

The Production Possibilities Frontier is nothing but a simple graphic that represents the combinations of output that an economy (or other entity) is capable of producing.

For example, say that in their work a particular marketing department is capable of either writing blog posts, or designing info-graphics.

  • If they spend all their time writing, they can make 50 blog posts.
  • If they spend all their time designing, they can make 100 info-graphics.
Their production possibilities frontier would look something like this:

(Note that many times, the production possibilities frontier can also be non-linear.)

It also shows the concept of opportunity costs in the sense that producing one thing comes at the cost of not being able to produce something else.

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Filed Under: PotpourriTagged With: #Economics101

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