Which of the following is an assumption used in deriving a production possibilities curve?
A) Poverty always exists in society.
B) The wages in an industry increase constantly.
C) Prices will continue to increase.
D) The amount of resources is fixed.

Question

Quizplus · Accepted Answer

A production possibilities curve is based on the assumption that the quantity of resources available in the economy is fixed. This means that there is a limit to the amount of goods and services that can be produced, as there are only a certain amount of resources (such as labor, materials, and capital) available to produce them. The other options (A, B, and C) are not relevant assumptions for deriving a production possibilities curve.

Which of the Following Is an Assumption Used in Deriving