Which of the following is NOT an assumption under which the production possibilities curve is drawn?
A) The economy's resources are fully employed.
B) The price level is stable.
C) Technology is being held constant.
D) The supplies of factors of production are fixeD.
E) The trade-off of one good for another is always constant.

Question

Quizplus · Accepted Answer

The stability of the price level is not a necessary assumption for drawing a production possibilities curve. The other assumptions - full employment of resources, constant technology, fixed supplies of factors of production, and a constant trade-off between the production of two goods - are all essential for the construction of a production possibilities curve.

Which of the Following Is NOT an Assumption Under Which