A One-Factor Economy Production possibilities The production possibility frontier(PPF) of an economy shows the maximum amount of a goods(say wine)that can be produced for any given amount of another(say cheese), and vice versa. Or illustrates the different mixes of goods the economy can produce The PPF of our economy is given by the following equation lLcOc+ arROW=l From our previous example, we get Qc+2gw=120 Copyright C 2003 Pearson Education, Inc Slide 1-12Copyright © 2003 Pearson Education, Inc. Slide 1-12 ▪ Production Possibilities • The production possibility frontier (PPF) of an economy shows the maximum amount of a goods (say wine) that can be produced for any given amount of another (say cheese), and vice versa. Or illustrates the different mixes of goods the economy can produce. • The PPF of our economy is given by the following equation: aLCQC + aLWQW = L (2-1) • From our previous example, we get: QC + 2QW = 120 A One-Factor Economy