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Constructing Production Possibilities Frontiers

Introduction

Hochstein defines a Production Possibility Frontier (PPF) as a linear curve projected to illustrate the absolute output possibilities of specified goods and services given an array of resources (2014).This paper presents the hypothetical PPFs of wealthy and developing economies with particular attention to Brazil and China (see figure 1). Over and above that, it also outlines relative aspects including trade-offs and environmental quality treaties among others.

Body

Production Possibilities Frontiers for China and Brazil
Figure 1: Production Possibilities Frontiers for China and Brazil

The conventional impairments of the environmental quality entail air and water pollution, with respect to the PPF above. Air pollutants include sulfur compounds, ammonia, benzene, carbon monoxide, fumes, dust, and other suspended particulate matters (Kellman & Shachmurove, 2011). Air desecration in Brazil has induced numerous recurrent damages to plant foliages causing them to look like dead tissues or necrotic lesions. As a result, coffee shrubs lack fully developed branches and die, thus decreasing the production output (see figure 1). Additionally, water pollution has prevailed due to the intake of synthetic nitrogen fertilizers and heavy metals (cadmium and mercury) that linger in water bodies (Kellman & Shachmurove, 2011). These contaminants penetrate into food crops, and their effect serves to diminish the agricultural yields as well as trigger diseases such as kidney stones and cancer.What are the Effects of Environmental Quality on the Above PPF?

What are the Trade-Offs Experienced When Equal Increases in Clean Air and Water Occur?

This segment features the existent trade-offs regarding economic progression and environmental augmentation of clean air and water that has been recently imposed by the Clean Air Act Legislation. An agricultural entity obtains the supplementary supplies of pure water and air by engaging payment for the replenishments (Kellman & Shachmurove, 2011). The agricultural entity and the supplier mutually benefit, as both attain their interests, remarks Hochstein (2014). The supplier has plenty of pure air and water reserves and is enthusiastic to trade them off in exchange for a bonus income (see figure 1).

How have Trade and Specialization Affected Production Expansion? Can These Effects be Applied Universally?

Trade and specialization have impinged on the production expansion of Brazil and China because of their way to engage agricultural produce in market exchange, explains Hochstein (2014). At point A, Brazil employs absolute specialization in the growth of its coffee for purposes of trade and elevates foreign income from China (see figure 1). In the event, it bypasses the necessary care and consideration due to the production of its other harvests comprising sugarcane, beef, and soybeans (Kellman & Shachmurove, 2011). The aftereffect is that its other goods and services will entail inefficiency, low quality, and low capacities (Hochstein (2014). The gravitation of economy towards one prime commodity also necessitates higher levels of capital and production costs to facilitate an enhanced competency of that particular production. Kellman and Shachmurove outline that these effects are explicitly applicable across the globe as the management of goods, as well as the involved expertise, is similar (2011).

Why Might the Kyoto Protocol Require Greater Reduction Targets for Richer Countries?

As defined by Kellman and Shachmurove (2011), the Kyoto Accord functions to inhibit the emission margins pertaining to greenhouse gas ejections including methane, hydrofluorocarbons, and perfluorocarbons. This protocol delegates greater reduction targets onto affluent states considering that they effuse numerous greenhouse gasses and reinforce the global warming parameter (Hochstein, 2014). Their blooming industrial domains are considerably instrumental in the exhalation of sewer gasses and solvents such as gasoline and kerosene that precipitate headaches, drowsiness, and death.

Conclusion

In conclusion, an economy’s PPF exists in theory only, as, in all genuineness, states strain to attain this ideal production qualification. As regards specialization, any bias towards one commodity spawns inadequate utilization of supplies, curtailing future growth for the country.

References

Hochstein, A. (2014). Accelerator vs. multiplier in a Production Possibility Curve framework. International Advances in Economic Research, 20(3), 399-344.

Kellman, M., & Shachmurove, Y. (2011). Diversification and specialization paradox in developing country trade. Review of Development Economics 15(2), 212-222.