HOSPITAL AND ITS PATIENT CARE
Being on the line of the PPF indicates, that the hospital is as much efficient, as it is possible with its actual inputs and resources- (maximum usage of factors of production- land, labour, capital). But the efficiency can be directed to different areas of the hospital services. This is called the opportunity cost. Our hospital has two areas of choice. The cancer treatment and non-cancer treatment. Deciding the percentage of dividing the efficiency means different allocations of resources. So if you want to shift from one side to another (increase the efficiency in one area, so the second one will be opportunity cost), it means that the hospital has to educate their labour for the work that is needed and also there is problem with the technology- because e.g. technology, which is used for cancer treatment, can not be used in other sectors of medical care. So the PPF is not directly proportional because not all the resources can be used for everything.
If hospital would be under the PPF, it would mean that hospital could be with its actual resources more effective, than is its actual situation. So e.g. there are unemployed doctors and unused technology, which helps with the cancer treatment, but hospital does not use them even hospital has enough money to pay all these unused resources. In this situation, hospital would not have to sacrifice anything, to increase their efficiency; they would have to just implement their unused resources. Being under the PPF would show to the hospital, that there are some opportunities in health care, which can be easily reached.
The problem with trying to increase the efficiency in one area to the prejudice of other one is that even e.g. labour shifts to that one area from different one, they can not be as efficient as other labour, which is much more educated about that area of interest.
When hospital would like to extend their PPF outwards, it would mean, that they have to look for...