FIGURE 2-1 The Production Possibility Frontier
imageThe production possibility frontier illustrates the trade-offs Boeing faces in producing Dreamliners and small jets. It shows the maximum quantity of one good that can be produced given the quantity of the other good produced. Here, the maximum quantity of Dreamliners manufactured per year depends on the quantity of small jets manufactured that year, and vice versa. Boeing’s feasible production is shown by the area inside or on the curve. Production at point C is feasible but not efficient. Points A and B are feasible and efficient in production, but point D is not feasible.