Then you've organized your thoughts about two distinct pieces of a complete argument: limitations due to physical tradeoffs, and limitations due to the quantity demanded for things being different at different prices faced by consumers in terms of the physical elements making up a produced good.
I don't understand why that's a bad thing. From the point of view of what is actually produced, all these constraints matter. Attempting to put them all into a model and then examine the remaining degrees of freedom strikes me as a worthwhile exercise.
Perhaps "production possibility frontier" is a misnomer, though.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
If one sector runs into a hard upper limit to production, leading to scarcity-induced price inflation in that commodity, demand for all complementary commodities will decline. This has dramatic consequences, in that a fairly small number of resource constraints can seriously hamper a modern, highly interconnected economy. And this is not obvious from a purely supply-side picture.
