In constructing a production possibilities curve, all of the following are assumed EXCEPT
A) resources are fully employed.
B) the quantity and quality of resources being used is fixed.
C) the state of technology is improving.
D) the time period involved is fixed.

Question

Quizplus · Accepted Answer

In constructing a production possibilities curve, it is assumed that resources are fully employed, the quantity and quality of resources being used is fixed, and the time period involved is fixed. However, it is not assumed that the state of technology is improving. Instead, the production possibilities curve represents the maximum possible combinations of two goods that can be produced given the current state of technology and resources.

In Constructing a Production Possibilities Curve, All of the Following