Production Possibility Frontier (PPF) explained (PPC)

Production possibility frontier PPF also called production possibility curve PPC is A graph that shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently.
All points below and to the left of the curve (production possibility frontier) represent combinations of Beer and Wine that are possible for the society given the resources available and existing technology.
Although an economy may be operating with full employment of its land, labor, and capital resources, it may still be operating inside its ppf (production possibility frontier), at a point such as A. The economy could be using those resources inefficiently.
Periods of unemployment also correspond to points inside the ppf (production possibility frontier), such as point A.
Moving onto the frontier like point B means achieving full employment of resources.
Points above and to the right of the curve, such as point C, represent combinations that cannot be reached.
If an economy were to end up at point A on the graph, it would be producing no consumer goods at all; all resources would be used for the production of capital. If an economy were to end up at point B, it would produce only consumer goods.
The ppf illustrates a number of economic concepts. One of the most important is opportunity cost. The opportunity cost of producing more Beer is fewer Wine.
0:00 PPF Production Possibility Frontier
3:00 Opportunity cost on the PPF
#productionpossibilityfrontier #ppfexplained#ppcexplained #economics

[@zahrafatty5286]

Wow...I'm on assignment an I must confess this is indeed helpful

[@SocratGhadban]

Thank you Zahra, Glad it helped you :)

[@carmenwhittaker3749]

Thank you Socrat - made so much more sense than our SA lecturer "tried" to explain it.

[@SocratGhadban]

My pleasure! not easy to make things look easy =)

[@navodachanchala6105]

Woow woow woow...how amazing this video is? I havent engaged with the economic subject . But I have to face economic in my university in this currently . I started to love economic because of your video . It clearly teaches the lesson ..Thank you..Wish u all the best...❤️

[@SocratGhadban]

You made my day! thank you for your kind words! so glad that you liked the video!

[@jamestoland5176]

Explained so well, thanks!

[@SocratGhadban]

Thank you James!

[@user-ny9fz3mz6k]

Best explanation ever!❤

[@SocratGhadban]

Thank you! :)

[@vikalikudrausa9019]

I love this video. The explanation is very simple and easy to understand. I am currently learning about this concept and now i won't have to worry about this type of questions appearing in the finals at University.

[@SocratGhadban]

Great to know that you loved the video.. I wish you all the best in your finals :)

[@shoto6329]

thank u so much for this. ur explanation i so direct and also the example were easy to understand. more power to u sir!

[@SocratGhadban]

Thank you for your kind words! I'm glad you found it useful!

[@espoirbash2779]

Thank you for the help.

[@SocratGhadban]

My pleasure!

[@lilmanmast9822]

thank you for explaining, this was very helpful

[@SocratGhadban]

My pleasure!

[@user-oi3iq7zf7g]

Thank u soo much for giving a super simple and clear explanation 😊

[@SocratGhadban]

A great pleasure :)

[@meyk7653]

Thanks that’s really helped!

[@SocratGhadban]

My pleasure!

[@papacaramel5102]

SO CONCISE AND INFORMATIVE

[@SocratGhadban]

Thank you!

[@chocolate_liberty2835]

EASY AND VERY HELPFUL THANK YOU

[@SocratGhadban]

Thank you! Glad it was helpful. cheers!

[@-raingod]

Thank you so much.

[@SocratGhadban]

My pleasure!

[@aa-op1pb]

Simple and easy to understand 👍

[@SocratGhadban]

Thank you!

[@hatimamuzamil7098]

Well explained, thank you

[@SocratGhadban]

Thank you Hatima :)

[@sarahtrabolsi3727]

very helpful!! thank youu

[@SocratGhadban]

Thank you Sarah! Good luck on your exam!

[@Muslim-155]

learning this for grde 10

[@tigisttg-rc2ul]

Thank you ver much sir, Now I anderstand it by easy way❤❤❤❤

[@SocratGhadban]

Happy for you!

[@user-xl6ij4or7b]

This video is so good for understanding

[@SocratGhadban]

Thanks, feel free to share it!

[@sarangborse2873]

Best ❤️

[@3.5io11]

easy to understand and helpful. Thank you 🙏🏾

[@SocratGhadban]

You're very welcome!💐

[@alleyfuse112]

Thanks for explaining. I have to take Economics virtually and it's hard for me to learn by reading.

[@SocratGhadban]

My pleasure! check other videos and you will have a very strong base in Economics!

[@thinukawijerathne]

Thanks 😊

[@SocratGhadban]

You're welcome :)

[@rohitkasbe1165]

Thanks sir🙏

[@SocratGhadban]

You're the most welcome!

[@rayanehammoud2258]

Good job😃

[@SocratGhadban]

Thanks 😁

[@MaryamAlbalooshi-qt8wn]

Excellent I loved the video! I have to draw PPF for a project. Please tell me how you got this done.

[@SocratGhadban]

Thank you for your feedback.. You can do it on excel and put the different points combination and you insert. Check this instead of weeks put the other variable www.howtogeek.com/462170/how-to-make-a-curved-graph-in-excel/

[@dontlookplease2393]

great video !! i was wondering if the points inside and on the ppc are attainable or not

[@SocratGhadban]

Thanks, inside and on the pff yes, outside not and this why it's called frontier..

[@mbuguawamwere7025]

great lesson, what app are you using to draw that?

[@SocratGhadban]

Thank you, I did it simply on PowerPoint

[@mbuguawamwere7025]

@@SocratGhadban one last question. Is F or B more efficient than D or E?

[@SocratGhadban]

@@mbuguawamwere7025 All these points are the same regarding efficiency, but it depends on the entity in question to choose at what point to produce based on certain market information

[@mbuguawamwere7025]

@@SocratGhadban Uh huh! so this is where market demand and allocative efficiency come in. Cheers🍻

[@melishamoses624]

if the producer is producing at point B and decides to produce at point E ,what would happen to the production level of both goods like in terms of gain and loss

[@melishamoses624]

if the producer is producing at point B and decides to produce at point F ,what would happen to the production level of both goods in terms of gain and loss. 🙏🏻

[@SocratGhadban]

In this case he will lose 25 Beer and will gain 10 Wine

[@ericleung11]

Imports accounted for abour 70% of sales of port meat in Australia. Pork imports from Denamrk, Canada, and the United States rose 48% in the past year. Australian producers receive about $2.30 per kilogram, which costs $3 to produce. Canada is an important supplier of pork meat to Australia, while Australia exports wine to Canada. Draw both an Australian and a Canadian PPF for wine and pork which are consistent with this pattern of trade. Lable the curves. Vertical -Wine (thousands of bottles) Horizontal - Pork meat (thousands of kilograms) Plese can anyone help to solve this question ?

[@SocratGhadban]

For Australia, since the cost of producing pork is higher than the price they receive, it means that their production of pork is not efficient, and they could produce wine at a lower cost. Therefore, the PPF for Australia would show that they have a comparative advantage in producing wine, and their production of pork is limited due to high costs. For Canada, since they are an important supplier of pork meat to Australia, it suggests that they have a comparative advantage in producing pork. Thus, the Canadian PPF would show that they have a higher potential for producing pork than wine.

[@yonaneffati3516]

i cant find any video explaining how to calculate opp cost of A to B ( so inefficient point to efficient point ). Do i use the same method as point B to F or is it impossible? pls help me

[@SocratGhadban]

One assumption for the PPF model that the economy/ firm is producing efficiently... When moving from A to B you have no loss but gain on both levels beer and wine. Thus, the opportunity cost is zero and linked to the fact that you were in an inefficient point which means not employing or using the resources on hand.. (keep in mind that we have only two choices of production and there is not third one which might change the interpretation)

[@tae_tee_btsarmy7664]

How did you get, Efficiency point? How did you calculate it

[@SocratGhadban]

If you mean the different points, they are given

[@jackiepar7103]

Does the point c show scarcity

[@SocratGhadban]

in all cases you have scarcity check the following video that defines scarcity kzbin.info/www/bejne/ipOyhatjfamopdE

[@aishamahama4158]

Under what circumstances can a country produce at point c

[@SocratGhadban]

Given the current state of production and technology point C is unreachable, however on the long run which means with a new technology or with time the whole PPF moves to the right and point C becomes attainable!

[@aishamahama4158]

Can opportunity cost be the reason to produce at point c?

[@SocratGhadban]

@@aishamahama4158 no, the reason is being more efficient, so with the same resources you can produce greater quantities of goods and services in question

[@ralphkoyess722]

Kbirr

[@SocratGhadban]

😅👍