When constructing a production possibilities frontier,which of the following assumptions is not made?
A)The economy produces only two goods or two types of goods.
B)Firms produce goods using factors of production.
C)The technology available to firms is given.
D)The quantities of the factors of production that are available are increasing over the relevant time period.

Question

Quizplus · Accepted Answer

The assumption that the quantities of factors of production are increasing over time is not made when constructing a production possibilities frontier. Instead, the level of factors of production is assumed to be fixed in the short run, although it may increase in the long run as the economy grows.

When Constructing a Production Possibilities Frontier,which of the Following Assumptions