Generating data for a simulation of a convex Production Possibilty Frontier

[Peter Jakobsen]

Say you wanted to use Stata and some type of Monte Carlo simulation to draw a PPF for your students. How would you generate the data required to draw a convex curve on a 2 dimensional graph representing say production of Food and Housing so that the curve is convex?

[Scott Merryman]

You could the equation for a circle or ellipse:

twoway function y = sqrt(25- x^2), range(0 5)  /// 
    ||  function y = sqrt(25 - 25*x^2/16) ,range(0 4) /// 
    || , ytitle(Housing) xtitle(Food) aspect(1)