Explain the production possibilities frontier. What are the main assumptions?© BrainMass Inc. brainmass.com December 24, 2021, 4:43 pm ad1c9bdddf
The PPF is used to better understand the basic economic problems of scarcity and choice. Scarcity is the most basic of problems. But, given the scarcity of financial resources that we face, we must ponder choices.
We use the production possibilities frontier to help us understand in an economic context the constraints caused by scarcity and the resulting choices. If you are taking microeconomics, choice will often be described in terms of the individual's or firm's decision. In macroeconomics, choice has a broader ...
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