Question

explain four Assumptions of production possibility curve ( full explain)​

Answer 1

Answer:

The production possibility curve is based on the following Assumptions: (1) Only two goods X (consumer goods) and Y (capital goods) are produced in different proportions in the economy. ... (2) The production techniques are given and constant. (3) The economy's resources are fully employed and technically efficient.

Explanation:

Hope this will help you.

Please mark as brainlist answer.

Answer 2

Answer:

Production possibility curve, in short called PPC is the graphical representation of the possible combinations of two goods that an economy can produce with it's limited resources and technology.

The assumptions of PPC are :-

• "The first assumption is that the economy is producing only two goods." This assumption is just for the simplicity of understanding.

• The second assumption is that the resources are not equally efficient in production of every good so as a result, production capacity changes as resources are transferred from production of one good to another.

• The third assumption is that, resources are fully and efficiently utilised i.e. there is no wastage of resources.

• The fourth assumption of PPC is that the level of technology is assumed to be constant.