{"id":5303,"date":"2019-02-15T09:17:54","date_gmt":"2019-02-15T03:47:54","guid":{"rendered":"http:\/\/astan.lk\/al_virtualclassroom\/?p=5303"},"modified":"2019-02-16T09:52:30","modified_gmt":"2019-02-16T04:22:30","slug":"production-possibility-boundary","status":"publish","type":"post","link":"https:\/\/astan.lk\/al_virtualclassroom\/production-possibility-boundary\/","title":{"rendered":"Production possibility boundary."},"content":{"rendered":"<p>Limitations exists on the maximum production possibility of limited resources in a given situation.<br \/>\nResources have alternative uses.<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>The line drawn on combining the maximum combinations of outputs using the existing<\/strong><br \/>\n<strong>stock of resources fully utilizing with maximum efficiency is known as the production<\/strong><br \/>\n<strong>possibility frontier.<\/strong><\/li>\n<li><strong>The Production possibility frontier is identified by alternative names as: Production<\/strong><br \/>\n<strong>possibility line.<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span style=\"color: #000000;\"><strong>Production possibility curve is developed using the assumptions mentioned below.<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Produce only two goods<\/span><\/li>\n<li><span style=\"color: #000000;\">Stock of resources is fixed<\/span><\/li>\n<li><span style=\"color: #000000;\">Existing technology does not change in the given period of time<\/span><\/li>\n<li><span style=\"color: #000000;\">Resources are fully utilized with maximum efficiency<\/span><\/li>\n<li><span style=\"color: #000000;\">The factors mentioned below determine the production possibility in a country<\/span><\/li>\n<li><span style=\"color: #000000;\">Stock of resources<\/span><\/li>\n<li><span style=\"color: #000000;\">Productivity of the resources Slope or the gradient of a production possibility curve can be identified as the ratio of movement along the production possibility curve, the forgone amount of the other goods when a fixed amount of a certain good increases.<\/span><br \/>\n<span style=\"color: #000000;\"> According to the behavior of the gradient of the production the possibility curve or marginal opportunity, cost, the production possibility curve exists in three shapes as given below .<\/span><\/li>\n<li><span style=\"color: #000000;\">Straight line<\/span><\/li>\n<li><span style=\"color: #000000;\">Concave to the origin<\/span><\/li>\n<li><span style=\"color: #000000;\">When moving along the production possibility curve by increasing the fixed amount of<\/span><br \/>\n<span style=\"color: #000000;\"> a certain good the amount forgone from the other good is considered as the constant production possibility curve.<\/span><\/li>\n<\/ul>\n<h3><span style=\"color: #000000;\"><strong>Due to following reasons the opportunity cost becomes constant<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Homogeneous Resources<\/span><\/li>\n<li><span style=\"color: #000000;\">Resources efficient for one industry and is the same for the other industry also<\/span><\/li>\n<li><span style=\"color: #000000;\">The production possibility curve that is concave to the origin is the increasing opportunity cost<\/span><\/li>\n<li><span style=\"color: #000000;\">If the forgone amount of the other good increases while increasing a fixed amount from a certain good when moving along a production possibility curve, is known as increasing opportunity cost<\/span><\/li>\n<\/ul>\n<h3><span style=\"color: #000000;\"><strong>The reasons mentioned below affect increase opportunity cost<\/strong><\/span><\/h3>\n<ul>\n<li><span style=\"color: #000000;\">Resources are non homogeneous<\/span><\/li>\n<li><span style=\"color: #000000;\">The resources efficient for one industry are not efficient for the other Industry in the same way.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Limitations exists on the maximum production possibility of limited resources in a given situation. Resources have alternative uses. &nbsp; The line drawn on combining the maximum combinations of outputs using the existing stock of resources fully utilizing with maximum efficiency is known as the production possibility frontier. The Production possibility frontier is identified by alternative [&hellip;]<\/p>\n","protected":false},"author":842,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[54,2679],"tags":[],"class_list":["post-5303","post","type-post","status-publish","format-standard","hentry","category-economics","category-unit-1-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Production possibility boundary. - Learning &amp; Education Portal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/astan.lk\/al_virtualclassroom\/production-possibility-boundary\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Production possibility boundary. - Learning &amp; Education Portal\" \/>\n<meta property=\"og:description\" content=\"Limitations exists on the maximum production possibility of limited resources in a given situation. 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