1. Production Possibility Frontier (PPF)
We must assume that

2. Production Possibility Frontier6 2
Good X
Good Y A 2 8 B
X – ex Y łaj

3. Production Possibility Frontier
Good X
Good Y B A

4. Production Possibilities Curve – example for Grades in Mathemtics and Economics
A – only this extreme positions are
In this case expect a grade A
X axis Y axis

5. Production Possibility Frontier – Definitions
For each level of the output of one good, the production possibility frontier shows the maximum amount of the other good that can be produced.
A graph that shows all the combinations of goods and services that can be produced if all of society’s resources are used efficiently.
A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.). The PPF assumes that all inputs are used efficiently.

6. Production Possibility Frontier
Good Y A B C 6
Good X

7. Production Possibility Frontier - Production Possibility Set
Good X
Good Y
All this triangle

8. A Typical PPF Picture
Good Y
Very important aspect / feature of
Good X

9. The Shape of the PPF Good Y Good X At the expense of – kosztem
In order to produce more units of food
Good X

10. The Shape of the PPF
Good Y
Good X

11. Marginal Rate of Transformation (MRT)
Consumer Goods (Pizza)
MRT = -R / P
100 A 90
Cost = 40 pizzas B 50
We have to shift / transfer 40 units of pizza to 20 units of robots more / to the prodution od robots.
Minus here shows that we give up certain product at certain level . We deside to produce less / fever units of pizza.
We can calculate MRT by dividing …
Benefit = 20 robots 25 45 50
Capital Goods (Robots)

12. Marginal Rate of Transformation
The rate at which one good must be sacrificed in order to produce a single extra unit (or marginal unit) of another good, assuming that both goods require the same scarce inputs.
The marginal rate of substitution is tied to the production possibilities frontier (PPF), which displays the output potential for two goods using the same resources. To produce more of one good means producing less of the other because the resources are efficiently allocated.

13. Good Y 60 50 40 30 20 10 10 20 30 40 50 60
Good X

14. Good Y 40 32 20
The slopes at all points are different.
By another ten unit ( o kolejne 10 jedn.) from industry Y to industry X
The cost of this operation is hight thab in the previous period 10 20 30
Good X

15. Law of Increasing Relative Cost
As society attempts to produce more units of certain good, the opportunity cost of additional units of that good generally increases.
With what I have already presented / talk about there is … closely connected
It was shown / wsa described in those last picture

16. Attainability of Production Level
Good Y
Attainable
Unattainable
Attainable
Attainable
Where we are talking about PPF we also have to mention / describe/ show ..
Over
Below
As you remember this PPf means / stands for
Good X

17. Efficiency and the PPF D Good Y Efficient Unattainable A C Efficient
Inefficient
Efficient B
Placed on / which are on the curve
Good X

18. Efficiency Efficiency is getting the most from available resources.
The case in which a given level of inputs is used to produce the maximum output possible.
The situation in which a given output is produced at minimum cost.
The condition in which there is no possibility to rearrange production inputs which means we can not increase the production of one good without decreasing the production of another good.

19. Inefficiency
Waste and mismanagement are the results of a firm’s operating below its potential.
Is the situation when ..

20. Reasons for the Inefficiency
Typically countries aren’t operating along the PPF.
Reasons:
Un-/underemployment,
Resources or capital not used efficiently / is waste
Not the best technologies are applied
More fundamentally:
Imperfect information
Uncertainty
Laws and regulations
Market failures
Guess – zgadywać, precise information
Might buy/ want
Create new jobs/ workplace
changes in laws are not convienient for producers
It affects / in influence

21. Changes in the PPF a d c b . Consumer Goods (Pizza)
Unattainable with current resources and technology
100 a d 90
Cost = 40 pizzas
policy c b . 50
Inefficient – unemployed resources
Which seems quiet natural / obvious
Benefit = 20 robots 25 45 50

22. The PPF and Economic Growth
Consumer Goods
Economic Growth = (change in GDPt) (change in GDPt-1)
GDP at t
GDP at t-1
Economic Growth
Are becoming attainable
At lower cost of production
Are not necessary
Earlier – wczesniejszy
Later - późniejszy
Capital Goods

23. Economic Growth
Economic growth is an increase in the total output of an economy. It occurs when a society acquires new resources or when it learns to produce more using existing resources.

24. Reasons for Economic Growth
Physical capital
Human capital / labor
Technology
Resources
Entrepreneurship
In other words