The derivation of a production possibilities frontier assumes:

Question

Quizplus · Accepted Answer

The production possibilities frontier assumes that there is a fixed quantity of resources and technology available. This means that the economy must choose how to allocate its limited resources and technology in order to produce goods and services efficiently. Option A assumes unused resources, option C assumes inefficient resource allocation, and option D assumes that technology is free, which is not the case in reality.

The Derivation of a Production Possibilities Frontier Assumes