Question

Construct a production possibility frontier to illustrate Tom's earnings potential

Answer 1

Answer:

You have asked to construct production possibility frontier to illustrate Tom’s earning potential, but in your question I cant find any guidelines related to Tom! So I am explaining general briefing about production possibility frontier construction.

Explanation:

A production possibility Frontier also termed as PPF is a simple type of curve that illustrates the possible outcomes and amounts for production of two separate products or goods. In this process it is important to maintain fixed availability of few resources that may be said to be common and required by both products or items.

Using these given values a transformation or production possibility curve can be obtained. The curve is drawn coinciding the values for both goods, from X and Y axis.

The curve will definitely have different types of curve graph, depending on the production of each commodity. You need to keep in mind that the production of any one of the commodity may only increase in case the second commodity production decrease and vice versa.

I Hope this helps.