How to Use Excel in Production Possibilities Frontier

Written by dan howard
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How to Use Excel in Production Possibilities Frontier
A production possibilities frontier may be used to identify the optimal production rate of two related goods. (The book-keeper in a warehouse of polygraphic production image by terex from

A production possibilities frontier is a chart that compares the maximum production of one good given a certain level of production of another related good. In a production possibilities chart, as production of the first good increases you will see a decrease in production of the second good since less labour and capital may be used on the second good. You may use Microsoft Excel to create a simple production possibilities frontier chart with data that you have on relative production of two related goods.

Skill level:
Moderately Easy

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  1. 1

    Open the Microsoft Excel program and create a new Excel workbook.

  2. 2

    Type the names of the two production goods that you are comparing in the first two cells in the top row.

  3. 3

    Input the production possibilities for the two goods in the cells underneath the labels. Order your entries so that one good is listed in increasing order and the other is listed in decreasing order. You will always observe this increasing-decreasing pattern in a production possibilities curve because producing more of one good will result in less production of the other good.

  4. 4

    Highlight all cells on the worksheet that contain data.

  5. 5

    Click "Insert" in the menu at the top of the screen and select "Chart".

  6. 6

    Select XY (Scatter) from the Chart Type menu and click the Next button twice.

  7. 7

    Type in the box labelled "Value (X) axis:" the name of the first good. Type in the box labelled "Value (Y) axis:" the name of the second good.

  8. 8

    Click the Legend tab and uncheck the box next to "Show legend."

  9. 9

    Click the Next button and select whether you would like your production possibilities chart to be placed in a new worksheet or as an object in an existing worksheet. Click the Finish button to create the chart.

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