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Linear Prodcution Possibilities Frontier

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Draw a linear PFF representing the tradeoff between hot dogs and buns with 120 million workers available.

At the start of this particular economy, 120 mil workers are employed. 30m hot dogs and 30m buns are produced each day, which employs 60m workers for each.

Improved technology brings about an increase in productivity; one worker to produce a hot dog in one day, rather than two. Consumption also increases to 40m hot dogs and buns each day. Reallocation of labor is conducted; 40m workers produce hot dogs and 80m produce buns.

I understand how improved technology makes the use of workers more efficient, and also how the increased consumption brings about better economic profit. What I require assistance in understanding, is how to illustrate all of this on a linear PFF.

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Solution Summary

The expert examines linear production possibilities frontier and draws a linear PFF representing the tradeoffs between hot dogs and buns with 120 million workers available.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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