ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The economy only produces 2 goods or services
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The economy is using the latest methods
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A certain percentage of resources will be wasted
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An economy cannot work beyond the PPC
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Detailed explanation-1: -Answer. Answer: b. Resource in the economy are fixed .
Detailed explanation-2: -Answer and Explanation: All of the given choices are economic assumption in the process of developing a production possibilities frontier (PPF) except the assumption that the society will always be producing somewhere on the PPF.
Detailed explanation-3: -In drawing the production possibilities curve, we shall assume that the economy can produce only two goods and that the quantities of factors of production and the technology available to the economy are fixed.
Detailed explanation-4: -The resources are given and remain constant. The technology used in the production process remains constant. The resources and technology are fully and efficiently utilized. The technique of production remains constant.