54. The Production Possibilities Frontier

The production possibilities frontier is a simple economic model that illustrates the limits of production faced by an individual, a firm or a country because of the limitations placed on these entities by the reality that the means available to achieve our goals (our resources) are limited.

In the Video Varsity section there is a link to the following video that will help you understand opportunity costs and how countries (and individuals) can benefit from trade and consume at levels outside of the production possibilities frontier. It says:

COMPARATIVE ADVANTAGE AND GAINS FROM TRADE This is a VERY nice video - a must see if you wish to understand the concept.

(or you could pick it up here.

https://www.youtube.com/watch?v=xx9xNJlPOJo

Here is a link to the Wikipedia article: https://sites.google.com/site/economicssa123/the-production-possibilities-frontier---wikipedia-article