Asked by Brittany Whitworth on Jul 09, 2024
Verified
The construction of a production possibilities curve assumes:
A) the quantities of all resources are unlimited.
B) technology is fixed.
C) some resources are unemployed.
D) there is no inflation in the economy.
Production Possibilities Curve
A graphical representation that shows the maximum number of goods or services that can be produced using limited resources efficiently.
Technology Fixed
A scenario in economic models where the level of technology is assumed to remain constant, ignoring any potential technological advancements or changes.
- Gain insight into the elementary notion of a production possibilities curve and its consequences on economic output and effectiveness.
- Recognize the effects of technological changes and resource quantity/quality differences on an economy’s production possibilities.
Verified Answer
PR
Prrannav ReddyJul 12, 2024
Final Answer :
B
Explanation :
The production possibilities curve assumes that technology is fixed, meaning that the available methods of production do not change over time. It does not assume that resources are unlimited, that there is unemployment of resources, or that there is no inflation in the economy.
Learning Objectives
- Gain insight into the elementary notion of a production possibilities curve and its consequences on economic output and effectiveness.
- Recognize the effects of technological changes and resource quantity/quality differences on an economy’s production possibilities.