Why or when is a ppf curve biased?
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1.
www.haas.berkeley.edu/Courses/Fall1999/BA187/Notes/St...
2. econweb.tamu.edu/aglass/econ452/krugman05.pdf
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www.rsc.org/ej/FD/2006/b505684p.pdf
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A Production Possibility Frontier (PPF) curve represents the maximum output of two goods that an economy can produce with a given set of resources and technology. A PPF curve is said to be biased when it is not a straight line and exhibits a concave shape. There are two main reasons why a PPF curve can be biased: technological bias and resource bias.
1. Technological Bias: A biased PPF curve occurs when one good can be produced more efficiently than another, given the available resources. This can happen due to advancements in technology that make the production process more effective for one good compared to the other. For example, if technological advancements make it easier to produce cars compared to bicycles, the PPF curve will be biased towards car production.
2. Resource Bias: A biased PPF curve can also occur when the available resources are better suited for the production of one good over another. This can happen due to factors such as natural endowments or specialized skills of the workforce. For instance, if a country has abundant natural resources for agriculture but lacks the infrastructure for industrial production, the PPF curve will be biased towards agricultural output.
To determine whether a PPF curve is biased, you will need to examine the production capabilities and efficiencies of the two goods being considered. Consider factors such as technological advancements, resource availability, and the relative productivity of inputs used in the production process. These factors will influence the shape of the PPF curve and indicate any biases towards particular goods.