The production possibilities frontier model assumes all of the following, except
A)labour, capital, land, and natural resources are fixed in quantity.
B)the economy produces only two products.
C)any level of the two products that the economy produces is currently possible.
D)the level of technology is fixed and unchanging.

Question

Quizplus · Accepted Answer

The production possibilities frontier (PPF) model assumes that resources are limited and not every level of production is currently possible, which contradicts choice C. The PPF illustrates the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized, given a fixed level of technology and resources.

The Production Possibilities Frontier Model Assumes All of the Following