PPC and ASSUMPTION. in 12,th.class
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Heya....
Production Possibility Curve....
It is the curve showing different possible combinations of two goods that can be produce at given resources...
@ssumptions.....
* Resources are given...
* Resources are efficiently and fully utilize....
* Technology remains constant...
Production Possibility Curve....
It is the curve showing different possible combinations of two goods that can be produce at given resources...
@ssumptions.....
* Resources are given...
* Resources are efficiently and fully utilize....
* Technology remains constant...
Answered by
2
✨✨✨✔✔Production possibilities is an analysis of the alternative combinations of two goods that an economy can produce with existing resources and technology in a given time period. Like any economic analysis, production possibilities analysis builds on certain preconditions or assumptions.
✔✔The Role of Assumptions
Before discussing the specific assumptions of production possibilities, consider the general role that assumptions play in economic analysis. While assumptions are often criticized for being simplistic and unrealistic, they accomplish two things:
✔✔One, they establish abstract benchmarks for comparison. Assumptions are often used to create hypothetical, "perfect world" benchmarks for comparison with the real world. Although the economy never achieves perfection, it is nice to compare the real world with such theoretical ideals.
✔✔Two, they break an analysis into simpler, more easily manageable parts. As noted by the seventh rule of complexity, the real world is exceedingly complex. The real world is much easier to comprehend if it can be subdivided. In fact, this is the essence of the scientific method--to divide the complex world into simpler principles.
✔✔The Role of Assumptions
Before discussing the specific assumptions of production possibilities, consider the general role that assumptions play in economic analysis. While assumptions are often criticized for being simplistic and unrealistic, they accomplish two things:
✔✔One, they establish abstract benchmarks for comparison. Assumptions are often used to create hypothetical, "perfect world" benchmarks for comparison with the real world. Although the economy never achieves perfection, it is nice to compare the real world with such theoretical ideals.
✔✔Two, they break an analysis into simpler, more easily manageable parts. As noted by the seventh rule of complexity, the real world is exceedingly complex. The real world is much easier to comprehend if it can be subdivided. In fact, this is the essence of the scientific method--to divide the complex world into simpler principles.
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