points outside the production possibilities curve represent combinations of products that are
unattainable
title: Production–possibility frontier text: frontier (such as "A") can be produced but are productively "inefficient"; all points outside the curve (such as "X") cannot be produced with the given, existing resources. Not all points on the curve are Pareto efficient, however; only in the case where the marginal rate of transformation is equal to all consumers' marginal rate of substitution and hence equal to the ratio of prices will it be impossible to find any trade that will make no consumer worse off. Any point that lies either on the production possibilities curve or to the left of it is said to be an title: Production–possibility frontier text: to the left in response to a reduction in an economy's productive capability. Thus all points on or within the curve are part of the production set: combinations of goods that the economy could potentially produce. If the two production goods depicted are capital investment (to increase future production possibilities) and current consumption goods, the higher the investment this year, the more the PPF would shift out in following years. Shifts of the curve can represent how technological progress that favors production possibilities of one good, say guns, more than the other shifts the PPF outwards more along the favored title: Production–possibility frontier text: of one commodity for any given production level of the other, given the existing state of technology. By doing so, it defines productive efficiency in the context of that production set: a point on the frontier indicates efficient use of the available inputs (such as points B, D and C in the graph), a point beneath the curve (such as A) indicates inefficiency, and a point beyond the curve (such as X) indicates impossibility. PPFs are normally drawn as bulging upwards or outwards from the origin ("concave" when viewed from the origin), but they can be represented as bulging downward title: Factors of production text: factors are land, labor (the ability to work), and capital goods. Materials and energy are considered secondary factors in classical economics because they are obtained from land, labor, and capital. The primary factors facilitate production but neither becomes part of the product (as with raw materials) nor becomes significantly transformed by the production process (as with fuel used to power machinery). Land includes not only the site of production but also natural resources above or below the soil. Recent usage has distinguished human capital (the stock of knowledge in the labor force) from labor. Entrepreneurship is also sometimes considered a title: Utility–possibility frontier text: Utility–possibility frontier In welfare economics, a utility–possibility frontier (or utility possibilities curve), is a widely used concept analogous to the better-known production–possibility frontier. The graph shows the maximum amount of one person's utility given each level of utility attained by all others in society. Points on the curve are, by definition, Pareto efficient, while points off the curve are not. However, based on the extent of society’s preferences for an equal distribution of real income, a point off the curve may be preferred. All points on or below the utility–possibility frontier are attainable by society; all points above it are