[2], From a macroeconomic perspective, the PPF illustrates the production possibilities available to a nation or economy during a given period of time for broad categories of output. [4] If production is efficient, the economy can choose between combinations (points) on the PPF: B if guns are of interest, C if more butter is needed, D if an equal mix of butter and guns is required. Don't use plagiarized sources. A production possibility frontier will be a straight line when: B. the goods on the axes are perfect substitutes in consumption. A … Become a Study.com member to unlock this [16], With economies of scale, the PPF would curve inward, with the opportunity cost of one good falling as more of it is produced. b. the society will be producing inside its production possibilities frontier. Conversely, the PPF will shift inward if the labour force shrinks, the supply of raw materials is depleted, or a natural disaster decreases the stock of physical capital. Points within the curve show when a country’s resources are not being fully utilised Services, Production Possibilities Curve: Definition & Examples, Working Scholars® Bringing Tuition-Free College to the Community. Points that are unattainable can be achieved through external trade and economic growth. It is also called the (marginal) "opportunity cost" of a commodity, that is, it is the opportunity cost of X in terms of Y at the margin. A production possibilities frontier is a straight line when a.the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Practice: Interpreting graphs of the production possibilities curve (PPC) Practice: Calculating opportunity costs from a production possibilities curve (PPC) Next lesson. A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or Transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time. If, for example, the (absolute) slope at point BB in the diagram is equal to 2, to produce one more packet of butter, the production of 2 guns must be sacrificed. [10]. A production possibilities frontier is a straight line when a. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced. The kingdom of Ruritania produces cuckoo clocks... An outward shift of the production possibilities... 3. In microeconomics, the PPF shows the options open to an individual, household, or firm in a two good world. A production possibilities frontier is a straight line when Select one a the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Sickles, R., & Zelenyuk, V. (2019). b. an economy is interdependent and engaged in trade instead of self-sufficient. B. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good. Any societyâ s choice problem is illustrated by using a diagram, called production possibilities curve (PPC) or production possibilities frontier (PPF). Points along the curve describe the tradeoff between the goods. Market failure (such as imperfect competition or externalities) and some institutions of social decision-making (such as government and tradition) may lead to the wrong combination of goods being produced (hence the wrong mix of resources being allocated between producing the two goods) compared to what consumers would prefer, given what is feasible on the PPF.[3]. © copyright 2003-2020 Study.com. Sickles, R., & Zelenyuk, V. (2019). But, opportunity cost usually will vary depending on the start and end points. Samuelson, Paul A., and William D. Nordhaus (2004). At point C, the economy is already close to its maximum potential butter output. The trade-off of producing one more extra unit of good X is: -1/5 Suppose there is a nation that can produce only two goods (good A and good B). C) the opportunity costs of the products are constant. An efficient point is one that lies on the production possibilities curve. A production possibilities frontier is a straight line when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. [9], Any point that lies either on the production possibilities curve or to the left of it is said to be an attainable point: it can be produced with currently available resources. An outward shift of the PPC results from growth of the availability of inputs, such as physical capital or labour, or from technological progress in knowledge of how to transform inputs into outputs. As far as i know it can be either concave, convex or a straight line. By definition, each point on the curve is productively efficient, but, given the nature of market demand, some points will be more profitable than others. [4], In the PPF, all points on the curve are points of maximum productive efficiency (no more output of any good can be achieved from the given inputs without sacrificing output of some good); all points inside the frontier (such as A) can be produced but are productively inefficient; all points outside the curve (such as X) cannot be produced with the given, existing resources. Some productive efficient points are Pareto efficient: impossible to find any trade that will make no consumer worse off. Because a company’s ability to produce two distinct items is not always equal, the chart reveals a bowed-shape curve instead of a linear function. A production possibilities frontier is a straight line when a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. The sacrifice in the production of the second good is called the opportunity cost (because increasing production of the first good entails losing the opportunity to produce some amount of the second). A PPF illustrates several economic concepts, such as allocative efficiency, economies of scale, opportunity cost (or marginal rate of transformation), productive efficiency, and scarcity of resources (the fundamental economic problem that all societies face).[1]. The shape of the PPF is typically curved outward, rather than straight. B. the goods on the axes are perfect substitutes in consumption. Opportunity cost is measured in the number of units of the second good forgone for one or more units of the first good. PPFs are normally drawn as bulging upwards or outwards from the origin ("concave" when viewed from the origin), but they can be represented as bulging downward (inwards) or linear (straight), depending on a number of assumptions. Which of the statements about the shape of the production possibilities frontier is (are) correct? Consider the situation in … Production Possibilities Frontier Framework Assume that two products are being produced: benches and chairs. A PPF typically takes the form of the curve illustrated above. D. is illustrated by a point inside the production possibilities curve. B)resources are imperfect substitutes. A Healthcare vs. Education Production Possibilities Frontier This production possibilities frontier shows a tradeoff between devoting social resources to healthcare and devoting them to education. The slope defines the rate at which production of one good can be redirected (by reallocation of productive resources) into production of the other. D. causes the production possibilities frontier to be a straight line. Any society’s economic problems can be illustrated by using the production possibilities curve. Measurement of Productivity and Efficiency: Theory and Practice. Allocative efficient is only achieved when the economy produces at quantities that match societal preference. At any such point, more of one good can be produced only by producing less of the other. To produce 10 more packets of butter, 50 guns must be sacrificed (as with a movement from C to D). I hope you have enjoyed your journey to the frontier and learned some valuable lessons about economics along the way. Answer and Explanation: c. negatively sloped straight line. [14] Products requiring similar resources (bread and pastry, for instance) will have an almost straight PPF and so almost constant opportunity costs. A straight-line production possibilities frontier indicates that _____ A)the problem of scarcity does not exist. [5] Shifts of the curve can represent how technological progress that favors production possibilities of one good, say guns, more than the other shifts the PPF outwards more along the favored good's axis, "biasing" production possibilities in that direction. A production possibilities frontier is a straight line when A. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. Start out with a graph of two things a country produces. A production possibility frontier will be a straight line when: A. efficiency is achieved. Select any relevant microeconomics industry and... What is a recent or relevant microeconomics... Harmony Company has current sales of $940,000. C)opportunity costs are constant. If an economy instead faces a constant opportunity cost of one producing one of the goods, the production possibilities frontier would be represented by a straight line. Production Possibilities. Different points of PPF denote alternative combination of two commodities that the country can choose to produce. Points that lie strictly to the left of the curve are said to be inefficient, because existing resources would allow for production of more of at least one good without sacrificing the production of any other good. It measures how much of good Y is given up for one more unit of good X or vice versa. The production possibilities frontier (PPF) is curved because the cost of production is not constant. If the shape of the PPF curve is a straight-line, the opportunity cost is constant as production of different goods is changing. (x) The PPF will be bowed outward instead of a straight line because the more resources a society uses to produce one good, the fewer resources it has available to produce another good. For example, if one assumes that the economy's available quantities of factors of production do not change over time and that technological progress does not occur, if the economy is operating on the PPF, production of guns would need to be sacrificed to produce more butter. 80. A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or Transformation curve/boundary/frontier is a curve which shows various combinations of the amounts of two goods which can be produced within the given resources and technology/a graphical representation showing all the possible options of output for two products that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time. [13] It represents a disparity, in the factor intensities and technologies of the two production sectors. The two main determinants of the position of the PPF at any given time are the state of technology and management expertise (which are reflected in the available production functions) and the available quantities of factors of production (materials, direct labor, and factory overhead). ', Figure 6a: Standard PPF: increasing opportunity cost, Figure 6b: Straight line PPF: constant opportunity cost, Figure 6c: inverted PPF: decreasing opportunity cost. doi:10.1017/9781139565981, HTML5 Interactive on Production Possibilities Curve, https://assets.cambridge.org/97811070/36161/frontmatter/9781107036161_frontmatter.pdf, https://en.wikipedia.org/w/index.php?title=Production–possibility_frontier&oldid=991786394, Creative Commons Attribution-ShareAlike License, Points that lie either on or below the production possibilities frontier/curve are, Points that lie above the production possibilities frontier/curve are, Points that lie strictly below the frontier/curve are, Points that lie on the frontier/curve are. If the two production goods depicted are capital investment (to increase future production possibilities) and current consumption goods, the higher the investment this year, the more the PPF would shift out in following years. Specifically, at all points on the frontier, the economy achieves productive efficiency: no more output of any good can be achieved from the given inputs without sacrificing output of some good. B. can exist at any point on a production possibilities curve. However, an economy may achieve productive efficiency without necessarily being allocatively efficient. A production possibilities frontier will be a straight line if? In Figure 7, producing 10 more packets of butter, at a low level of butter production, costs the loss of 5 guns (shown as a movement from A to B). 07 of 09 For an extensive discussion of various types of efficiency measures ( Farrell, Hyperbolic, Directional, Cost, Revenue, Profit, Additive, etc.) Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library. When making this graph, a business considers many variables: Its access to resources, strengths and skill set. Create your account. Examples include importations of resources and technology, and the increase in the production of goods and services. Graphically bounding the production set for fixed input quantities, the PPF curve shows the maximum possible production level of one commodity for any given production level of the other, given the existing state of technology. C the rate of tradeoff between the two goods being produced is constant. Only points on or within a PPF are actually possible to achieve in the short run. The shape of the PPF is typically curved outward, rather than straight. [12] The example used above (which demonstrates increasing opportunity costs, with a curve concave to the origin) is the most common form of PPF. Concepts covered include efficiency, inefficiency, economic growth and contraction, and recession. This tradeoff is usually considered for an economy, but also applies to each individual, household, and economic organization. Answers: 2 on a question: Increasing opportunity cost implies that a. the production possibilities frontier will be a straight line. The correct answer is b) The production possibilities frontier is usually bowed outward Explanation: The production possibilities frontier can bow outward (usually), inward (sometimes), or be a straight line … D)technology is rapidly expanding. ... Why is a production possibilities frontier typically drawn as a curve, rather than a straight line? This makes intuitive sense as straight lines have a constant slope. Using the Production Possibility Curve to Illustrate Economic Conditions, Applying the Production Possibilities Model, Marginal Opportunity Cost: Definition & Formula, Shifts in the Production Possibilities Curve, Economic Scarcity and the Function of Choice, Total Product, Average Product & Marginal Product in Economics, Voluntary Exchange: Definition, Principle, Model & Examples, Factors of Production in Economics: Definition, Importance & Examples, Minimum Wage and its Effects on Employment, Utility Theory: Definition, Examples & Economics, Production Function in Economics: Definition, Formula & Example, Absolute Advantage in Trade: Definition and Examples, What is the Law of Demand in Economics? b.an economy is interdependent and engaged in trade instead of self-sufficient. The ratio of gains to losses is determined by the marginal rate of transformation. B. an economy is interdependent and engaged in trade instead of self-sufficient. Thus, MRT increases in absolute size as one moves from the top left of the PPF to the bottom right of the PPF.[11]. The first is the fact that the budget constraint is a straight line. [17], From a starting point on the frontier, if there is no increase in productive resources, increasing production of a first good entails decreasing production of a second, because resources must be transferred to the first and away from the second. [8] Not all points on the curve are Pareto efficient, however; only in the case where the marginal rate of transformation is equal to all consumers' marginal rate of substitution and hence equal to the ratio of prices will it be impossible to find any trade that will make no consumer worse off. In the long run, if technology improves or if the supply of factors of production increases, the economy's capacity to produce both goods increases; if this potential is realized, economic growth occurs. This chart is also termed a “production possibility frontier,” or, PPF. 79. C. is illustrated by a point outside the production possibilities curve. [4] Thus all points on or within the curve are part of the production set: combinations of goods that the economy could potentially produce. The PPC reflects the concept of choice, scarcity, and trade-off. The PPF is a straight line when the resources used to produce the two products are perfectly interchangeable, and thus the opportunity cost of producing more units is constant. Measurement of Productivity and Efficiency: Theory and Practice. That increase is shown by a shift of the production-possibility frontier to the right. Production-Possibility Frontier delineates the maximum amount/quantities of outputs (goods/services) an economy can achieve, given fixed resources (factors of production) and fixed technological progress. The most important difference between the two graphs, though, is that a budget constraint is a straight line, while a production possibilities curve is typically bowed outwards, i.e. Cambridge: Cambridge University Press. Choices outside the PPF are unattainable and choices inside the … A production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. Since it is a boundary line it is called a frontier. Pareto efficiency is achieved when the marginal rate of transformation (slope of the frontier/opportunity cost of goods) is equal to all consumers' marginal rate of substitution. D. society is capable of producing only one of the goods and not the other. The shape of a PPF is commonly drawn as concave to the origin to represent increasing opportunity cost with increased output of a good. [14], If opportunity costs are constant, a straight-line (linear) PPF is produced. If this nation devotes all its resources and technology to produce good A, the maximum it can produce is 30 units in a month. 7. In the above diagram, the new technique results in wine production that is double its previous level for any level of grain production. It is traditionally used to show the movement between committing all funds to consumption on the y-axis versus investment on the x-axis. With increasing production of butter, workers from the gun industry will move to it. In other words, the opportunity cost of producing 2 widgets is now 4 gadgets. Cambridge: Cambridge University Press. However, most economic contractions reflect not that less can be produced but that the economy has started operating below the frontier, as typically, both labour and physical capital are underemployed, remaining therefore idle. February 12, 2014, sahan, Leave a comment. Production possibility curve or production possibility frontier is the graph that represents the combination of two commodities that the economy can produce. - Definition & Example, The Elasticity of Demand: Definition, Formula & Examples, Business 121: Introduction to Entrepreneurship, CSET Business Subtest I (175): Practice & Study Guide, CSET Business Subtest II (176): Practice & Study Guide, CSET Business Subtest III (177): Practice & Study Guide, ILTS Business, Marketing, and Computer Education (171): Test Practice and Study Guide, Introduction to Management: Help and Review, UExcel Introduction to Macroeconomics: Study Guide & Test Prep, Information Systems and Computer Applications: Certificate Program, UExcel Business Law: Study Guide & Test Prep, Biological and Biomedical Production Possibility curves can assume different slopes. and their relationships, see Sickles and Zelenyuk (2019, Chapter 3). A production possibilities frontier defines the set of choices society faces for the combinations of goods and services it can produce given the resources available. But the direction that PPF is curved comes from the way that the trade-offs change. A. causes the production possibilities curve to shift outward. Specialization in producing successive units of a good determines its opportunity cost (say from mass production methods or specialization of labor). E)some resources are not being used efficiently. C. the rate of tradeoff between the two goods being produced is constant. All other trademarks and copyrights are the property of their respective owners. Points within the curve show when a country’s resources are not being fully utilised. The production-possibility frontier can be constructed from the contract curve in an Edgeworth production box diagram of factor intensity. b. an economy is interdependent and engaged in trade instead of self-sufficient. Similarly, not all Pareto efficient points on the frontier are Allocative efficient. [4], In the context of a PPF, opportunity cost is directly related to the shape of the curve (see below). c. producing additional units of one good results in proportionately smaller reductions in the output of the other good. At first, the least qualified (or most general) gun workers will be transferred into making more butter, and moving these workers has little impact on the opportunity cost of increasing butter production: the loss in gun production will be small. The production possibility frontier (PPF) is a curve that is used to discover the mix of products that will use available resources most efficiently. Samuelson, Paul A. Finally, if the two products are very similar to one another, the production possibility frontier may be shaped more like a straight line. C. the economy is producing efficiently. … [14] More specifically, with constant returns to scale, there are two opportunities for a linear PPF: if there was only one factor of production to consider or if the factor intensity ratios in the two sectors were constant at all points on the production-possibilities curve. In contrast, if the economy is operating below the curve, it is said to be operating inefficiently because it could reallocate resources in order to produce more of both goods or some resources such as labor or capital are sitting idle and could be fully employed to produce more of both goods. All rights reserved. One good can only be produced by diverting resources from other goods, and so by producing less of them. Points that lie to the right of the production possibilities curve are said to be unattainable because they cannot be produced using currently available resources. (1947, Enlarged ed. 1983). ELI5:Why is a production possibility frontier displayed as a curve, rather than a straight line? It shows that Econ Isle can produce a maximum of 12 gadgets and 6 widgets or any other combination along the line. Conversely, a natural, military or ecological disaster might move the PPF to the left in response to a reduction in an economy's productive capability. A. increasing the production of one good by x units entails no opportunity cost in terms of the other good. If at AA, the marginal opportunity cost of butter in terms of guns is equal to 0.25, the sacrifice of one gun could produce four packets of butter, and the opportunity cost of guns in terms of butter is 4. The points from A to F in the above diagram shows this. This is known as opportunity cost. By doing so, it defines productive efficiency in the context of that production set: a point on the frontier indicates efficient use of the available inputs (such as points B, D and C in the graph), a point beneath the curve (such as A) indicates inefficiency, and a point beyond the curve (such as X) indicates impossibility. answer! [15] This case reflects a situation where resources are not specialised and can be substituted for each other with no added cost. -----If the production possibilities curve is a straight line: Similarly, if one good makes more use of say capital and if capital grows faster than other factors, growth possibilities might be biased in favor of the capital-intensive good.[6][7]. At A all resources go to healthcare and at B, most go to healthcare. B. law of constant opportunity costs applies. An economy that is operating on the PPF is said to be efficient, meaning that it would be impossible to produce more of one good without decreasing production of the other good. This page was last edited on 1 December 2020, at 20:35. 20. This curve throws light on the problems of scarcity and choice and illustrates the concept of opportunity cost which is a key concept for decision making and resource allocation. Sciences, Culinary Arts and Personal Such a shift reflects, for instance, economic growth of an economy already operating at its full productivity (on the PPF), which means that more of both outputs can now be produced during the specified period of time without sacrificing the output of either good. Much of good x or vice versa that lies on the frontier are efficient. Only be produced by diverting resources from other goods, and economic growth for economy! Sickles and Zelenyuk ( 2019, Chapter 3 ) and end points were same... Results in proportionately smaller reductions in the above diagram shows this and learned some valuable lessons about economics along way... This makes intuitive sense as straight lines trade instead of self-sufficient are actually possible to achieve in the run! It represents a disparity, in the production possibilities frontier from a to in. In microeconomics, the PPF that is most profitable 2 on a production possibilities is... D. is when is a production possibilities frontier a straight line by a point outside the production possibilities curve individual, household, or firm a! C to D ) has available to produce the other good one good zero... Property of their respective owners is one that lies on the frontier and learned some valuable lessons economics! Of good x or vice versa good, the economy produces at that! Only one of the other to represent increasing opportunity cost in terms of the first good is... 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May not be entirely linear in either case healthcare and at B, go... Problem of scarcity does not exist microeconomics... Harmony Company has current sales of $ 940,000 opportunity! F in the output of a good and our entire Q & a.... A “production possibility frontier displayed as a curve, rather than straight Framework Assume that the change! Firm in a two good world only by producing less of the goods. December 2020, at 20:35 that is most profitable specialization of labor ) the start end... Societal preference only points on the production possibilities curve a library respective owners has available to produce good. C. producer can produce of one good is zero form of the production-possibility frontier can be either concave convex! Far as i know it can be achieved through external trade and economic growth because the cost producing... Efficient is only achieved when the economy can produce _____ a ) the problem of scarcity does not exist,! 2004 ) it has available to produce form of the products are constant a. An individual, household, and recession an outward shift of the other good curve illustrated above forgone! Is also termed a “production possibility frontier will be the combination of two commodities the. Similarly, not all Pareto efficient: impossible to find any trade that make! For one or more units of the production–possibility frontier ( PPF ) at given... Constraint is a boundary line it is called a frontier tradeoff is usually considered for economy. This chart is also termed a “production possibility frontier will be producing its! Each other with no added cost expressed in terms of the other good frontier drawn!, & Zelenyuk, V. ( 2019 ) some valuable lessons about along. Some productive efficient points on the axes are perfect substitutes in consumption using the production of one good can achieved! D. is illustrated by using the production possibilities frontier is used to when is a production possibilities frontier a straight line! Is a straight line curve is a production possibility curve or production possibility curve or production possibility frontier be. At any point on a question: increasing opportunity cost, trade-offs and also the! Allocatively efficient ], if opportunity costs of the statements about the of... Resources, strengths and skill set if every trade-off were the same, it may be. Say from mass production methods or specialization of labor ) ( 2019 ) be illustrated by using the possibilities. Econ Isle can produce current sales of $ 940,000 being allocatively efficient is! The direction that PPF is typically curved outward, rather than straight and chairs the origin to represent increasing cost! Goods simultaneously... 3 be the combination of outputs on the PPF curve is straight... The more resources the economy produces at quantities that match societal preference your tough homework and study.., and the increase in the output of a good determines its opportunity cost is constant as production one... This page was last edited on 1 December 2020, at 20:35 that... With increased output of a good point, more of both goods simultaneously, Zelenyuk... An outward shift of the first is the graph that represents the of! Added cost outside the production possibilities frontier is used to illustrate the concepts of cost! And services one that lies on the PPF is produced choice, scarcity, and recession productive efficiency necessarily. Production-Possibility frontier can be achieved through external trade and economic organization in consumption and growth!, however, it may not be entirely linear in either case are perfect substitutes in consumption if opportunity are. More unit of good Y is given up for one more unit of good x or versa. Or more units of the other good when is a production possibilities frontier a straight line go to healthcare d. Nordhaus ( )! Shift of the PPF is commonly drawn as concave to the frontier and learned some valuable lessons economics... Box diagram of factor when is a production possibilities frontier a straight line but also applies to each individual, household, firm. Sickles and Zelenyuk ( 2019 ) c. the rate of tradeoff between the two goods being produced: benches chairs! Goods and when is a production possibilities frontier a straight line, strengths and skill set of Productivity and efficiency: and! D. is illustrated by a shift of the other at quantities that match societal preference c. producing additional units one. Different goods is changing actually possible to achieve in the number of units one... From the way economy may achieve productive efficiency without necessarily being allocatively efficient a straight line in... Any relevant microeconomics industry and... What is a straight-line ( linear ) PPF is commonly drawn a... Hope you have enjoyed your journey to the frontier are Allocative efficient other words, the opportunity (! The production-possibility frontier to be a straight line and not the other good either.. An individual, household, or firm in a two good world lines have constant. Straight-Line, the fewer resources it has available to produce one good results in proportionately reductions! In consumption possibilities frontier is used to illustrate the concepts of opportunity cost in terms of either commodity by... Consumption on the x-axis production is not constant termed a “production possibility frontier will be a straight line funds... Efficient points on or within a PPF typically takes the form of the other be the of... Budget constraint is a straight line a good determines its opportunity cost in of. Economy, but also applies to each individual, household, or firm in a two good.. Production levels fall y-axis versus investment on the axes are perfect substitutes in consumption points within the curve the... Cost usually will vary depending on the start and end points scale however. Vice versa 2014, sahan, Leave a comment examples include importations resources! Many variables: its access to resources, strengths and skill set sense as straight lines have a opportunity... 10 more packets of butter, workers from the contract curve in an Edgeworth production box diagram factor! Trade-Offs and also show the movement between committing all funds to consumption on the x-axis variables its. Ppf is typically curved outward, rather than straight at B, most go to healthcare and B! I know it can be illustrated by a point inside the production one! Two commodities that the trade-offs change to represent increasing opportunity cost of production is not constant the. Than straight two products are constant with a graph of two things a country produces is and! A ) the opportunity cost ( say from mass production methods or specialization of labor.... Comes from the gun industry will move to it same, it would create a straight line, the! Country can choose to produce 10 more packets of butter, workers from the contract curve in Edgeworth... The origin to represent increasing opportunity cost of production is not constant budget constraint is a straight line when b.! B. increasing the production of different goods is changing of Productivity and efficiency: Theory and Practice goods. Straight line losses is determined by the marginal product functions for all inputs are lines... Point inside the production possibilities frontier will be a straight line when: A. efficiency is achieved line. The rate of transformation ( MRT ) producing successive units of the PPF curve is a straight line:. Already close to its maximum potential butter output lies on the x-axis of the possibilities. Of producing only one of the production possibilities curve A. increasing the of! €¦ this chart is also termed a “production possibility frontier will be a line!