Question

Which assumptions must be in place to plot all the possibilities on a Production Possibility Curve?

Choose TWO correct responses.

Select A
Everyone in the society has a job.

Select B
Natural resources are scarce.

Select C
Everyone in the society is unemployed

Select D
All resources are used efficiently

Select E
No modern technology is available.

Answer 1

B and D.

Explanation: A production possibility curve assumes scarce resources and that those resources are used efficiently (full employment and productive efficiency). It also typically assumes fixed technology and resource quantities, but not that “no modern technology” exists.