The transformation curve (also: production curve) is, in short, a graphical representation of all the product mix combinations which have previously been classified as efficient. The basis for this is in particular the given use of resources.
Another word for transformation curve, which is even more popular, as the production possibility curve. As the term suggests, the transformation curve shows the limits of production possibilities. It is thus shown what can be produced in a particular area of the economy.
Of course it is not possible to refer the values to an entire national economy of a whole country. Rather, the transformation curve should be used to create a theoretical concept for some smaller areas of the respective national economy.
Initial Situation
In order for a computationally solvable computation to be possible for a transformation curve, it first requires some assumptions to simplify the facts somewhat. For example, it should be assumed that there is, for example, only one production factor, which is still fully engaged at all times. In addition, it should, of course, be assumed that the necessary technical know-how as well as the respective machines are available and always work.
Graphic Representation
The primary goal of all calculations of the transformation curve is, of course, to obtain a graphical representation. But what does such a graphical representation of the production curve look like? It is shown in the above diagram.
On the X and Y axes, two different goods are first compared: 'Number of Tractors' on the Y axis and 'Number of cars' on the X axis. The actual transformation curve is then found in the center of the graph.
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