Question

What are the assumptions of Production Posibility curve ??

Answer 1

ANSWER

______________________________________

The Assumptions of Production Possibilty curve are as follows :-

• The amount of productive resources is fixed.

•There is no change in technology.

•All productive resource are fully employed.

•All resources are not equally efficient in the production of all goods. This means that if reaources are transferred from the production of one commodity to another, there is a decrease in their effciency resulting in increasing in the cost of Production.

•With the given resources and technology, the combination of two goods that lie anywhere on production assumption.

______________________________________