A production possibilities curve is drawn based on which of the following assumptions?
a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall.
b. Resources such as nonrenewable resources will decline, but labor remains fully employed and technology is unchanged.
c. Resources can vary; most resources experience times of unemployment; and technology advances, particularly during wartime.
d. Resources such as labor and capital will grow and are fully employed, and technology is unchanged.
e. None of the answers correct.
Prodcution Possibility Curve
Prodcution Possibility Curve is a tool used to solve the economic problem of what to produce by showing all such points where the resource of the economy are used in the best possible manner.In other words, Prodcution Possibility Curve is just an abstraction used to demonstrate the the concept of opporutinty cost. It is also known as transformation curve
Answer and Explanation: 1
The correct option is e. None of the answers correct.
None of the answers state the correct assumption that resources are fixed and fully employed,...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 8
The production possibility curve demonstrates the potential profit from a given economic condition. See how this illustrates different economic conditions through evaluating scarcity, production factors, efficiency, and opportunity costs.