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picture1_Production Pdf 193140 | 9 Item Download 2023-02-06 02-31-15


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File: Production Pdf 193140 | 9 Item Download 2023-02-06 02-31-15
international trade instructor ghislain nono gueye production possibility frontiers ppf let s study the economic model called the model of production possibility frontiers assumptions the economy produces two goods products ...

icon picture PDF Filetype PDF | Posted on 06 Feb 2023 | 2 years ago
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         INTERNATIONAL TRADE
              Instructor: Ghislain Nono Gueye
        Production Possibility Frontiers (PPF)
        • Let’s study the economic model called the model of production 
          possibility frontiers.
        • Assumptions:
        - The economy produces two goods/products only.
        - All the factors of productions are fully used (full employment).
        - The best technology available is used in the production of the two 
          goods/products. 
                                                                                        2
        What is a production possibility frontier?
        • A PPF indicates the maximum combination of two goods/products 
         that can be produced by an economy using all its available resources 
         as well as the best technology available.
        • Let’s use an example to have a better understanding of this new 
         concept.
        • Let’s suppose that an economy produces only 2 goods: tables and 
         chairs.
                                                                                     3
        What is a production possibility frontier? (2)
        • The only resource the economy has for the production of both goods 
         is wood (in limited quantity) and all of it is used: scarcity.
        • So the wood is either used for the production of tables or chairs: 
         choice.
        • Producing more tables means that we will have to produce less chairs: 
         opportunity cost.
                                                                                      4
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...International trade instructor ghislain nono gueye production possibility frontiers ppf let s study the economic model called of assumptions economy produces two goods products only all factors productions are fully used full employment best technology available is in what a frontier indicates maximum combination that can be produced by an using its resources as well use example to have better understanding this new concept suppose tables and chairs resource has for both wood limited quantity it scarcity so either or choice producing more means we will produce less opportunity cost...

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