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Guys any material that discusses the above in detail for a two commodity case?

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  • $\begingroup$ PPF is for Production Possibility Frontier (for all non english economists) $\endgroup$
    – vanya
    Oct 19, 2023 at 19:54
  • $\begingroup$ In what context are you interested in it? You mean in the sense of: „if I consume more of A, A will become cheaper“? $\endgroup$
    – vanya
    Oct 19, 2023 at 19:55
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    $\begingroup$ This might help: qr.ae/pGLAbN $\endgroup$
    – Amit
    Oct 20, 2023 at 2:51
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    $\begingroup$ @vanya I wanted to understand the geometry of the PPF for a two commodity case like conditions for it to be concave/convex/linear depending on the returns to scale each commodity exhibits. $\endgroup$
    – user205152
    Oct 20, 2023 at 4:55

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There is an indirect relationship. PPF size and shape is determined by production functions. Set of production functions $F_i= AK{^0.5}L^{0.5}$ will produce different PPF then set of production functions $F_i= A(K+L)^{0.5}$.

Only some production functions exhibit increasing, decreasing and constant returns to scale. So there is some relationship. However, you can generate so many varied PPF with various production function that it is difficult to exhaustively describe it.

You can see how PPF is calculated in microeconomics textbooks. Frank Microeconomics and Behavior has some examples of PPF for different production functions.

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  • $\begingroup$ @Giskard yes production functions do produce PPF. PPF is derived from production functions for goods. If good A has production function $A=10L$ and good B production function $B=L$ then PPF for A and B if country has L=100 is $100 = A/10 + B$. If you change production function for B to $B=10L$ you get new PPF $100=A/10 + B/10$. How else can you get PPF if not by using production functions for goods? $\endgroup$
    – WilliamT
    Oct 30, 2023 at 14:41
  • $\begingroup$ Note the emphasis. Production functions can determine a PPF, but A production function, what you write about in your answer, cannot. $\endgroup$
    – Giskard
    Oct 30, 2023 at 17:15
  • $\begingroup$ @Giskard you could just said so $\endgroup$
    – WilliamT
    Nov 3, 2023 at 14:38
  • $\begingroup$ I did, and when you asked for clarification, I clarified. $\endgroup$
    – Giskard
    Nov 3, 2023 at 14:48

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