Definition
- Production possibility frontier
- A production possibility frontier is a diagram showing the productively efficient combinations of two products that an economy can produce with the resources it has.
- Not to be confused with: Productive efficiency
- Productive efficiency is when it is impossible to produce more of one good or service without decreasing the quantity produced of another.
Test yourself
What is the difference between production possibility frontier and productive efficiency?
The frontier is the diagram; productive efficiency is what every point on it has in common.