Question

Which of the following is assumed in constructing a typical production possibilities curve?

A.The economy is using its resources inefficiently.
B.Resources are perfectly shiftable among alternative uses.
C. Production technology is fixed.
D. The economy is engaging in international trade.

Answer 1

Resources are assumed to be perfectly shiftable among alternative uses in constructing a typical production possibilities curve.

Step-by-step explanation:

The assumption made in constructing a typical production possibilities curve is that resources are perfectly shiftable among alternative uses. This means that the economy can easily switch its resources from producing one good to producing another good without any cost or loss in efficiency. However, in reality, resources are not perfectly shiftable, and there are limitations and costs associated with transferring resources from one use to another.

Answer 2

C. Production technology is fixed.