Rahanuma Islam MithilaId:16121035Department of Development StudiesBangladesh University of professionals(BUP)

•Why does an economy like Bangladesh produce much below its optimum attainable production possibilities?

• It is a graph representing production trade offs of an economy given fixed resources.• The graph shows the various

combinations of amounts of two commodities that an economy can produce per unit of time using a fixed amount of each of the factors of production, given the production technologies available.

Production possibility frontier (PPF)

Example

•Meaning that it would be impossible to produce more of one good without decreasing production of the other good.

Efficiency

• The two main determinants of the position of the PPF at any given time are the state of technology and management expertise and the available quantities of factors of production.

• Only points on or within a PPF are actually possible to achieve in the short run

• . 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. That increase is shown by a shift of the production possibility frontier to the right

Position of PPF

•Unskilled labor•Lack of new technologies•Capital • Ideas of new goods

Reasons an economy like Bangladesh produce much below its optimum attainable production possibilities

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• However, in recent era Bangladesh is adopting new technologies and they made their labor more skilled in specific sector than past but still Bangladesh produce much below its optimum attainable production possibilities.It can be overcome by an economy like Bangladesh by taking some necessary steps.