When Constructing a Production Possibilities Frontier, Which of the Following

question 49

Multiple Choice

When constructing a production possibilities frontier, which of the following is NOT an assumption?

• A) The economy produces more than two goods.
• B) All the economy's factors of production are being used.
• C) The economy has a fixed level of technology.
• D) The economy's available factors of production are fixed.

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Definitions:

Perfectly Inelastic

Describing a situation where demand or supply does not change in response to changes in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.

Price Elasticity

Quantifying the demand shift for an item in response to its price adjustments.

Responsiveness

The ability or tendency of an entity or system to react to changes, stimuli, or feedback from the environment.