Question
In: Economics
Which of the following represents an assumption in the PPC model ? a. the economy is...
Which of the following represents an assumption in the PPC model ?
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a. the economy is achieving full employment and full production |
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b. Resources remain fixed for a given period of time |
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c. Technology remains fixed for a given period of time |
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d. all of the above |
Solutions
Expert Solution
Option (d) is the correct answer.
All the above given assumptions are true regarding the
production possibility curve(PPC) model.
Under PPC model the economy achieves full employment and full
production.PPC curve is used to analyze full employment and full
production in the economy.Any point on PPC will imply full
employment and full production in the economy.The option (b) given
is true because under PPC model the resources remain fixed for a
given period of time.Full employment happens in the economy when
there is full utilization of the given resources .Here the
resources refers to the capital labor used for the production.Under
PPC model quantities of resources used for the production will
remain unchanged.Option c given is also correct.Under PPC model
technology also remains fixed for a given period of time.Hence all
the options given above are true regarding the production
possibility curve model.
Rahul Sunny answered 2 years agoRelated Solutions
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