Question

the construction of a production possibilities curve assumes multiple choice some resources are unemployed. technology is fixed. the quantities of all resources are unlimited. there is no inflation in the economy.

Explanation:

To determine the correct answer, we analyze the assumptions of a production possibilities curve (PPC):

• The option "some resources are unemployed" is incorrect because a PPC assumes full employment of resources (points on the curve represent efficient use, while unemployment would be inside the curve, not an assumption for constructing the curve itself).
• The option "technology is fixed" is a key assumption of the PPC. The PPC is constructed under the assumption that the level of technology remains constant during the period for which the curve is drawn. This is because technology affects the production capabilities, and holding it constant allows us to analyze the trade - offs between two goods with a given set of technological knowledge.
• The option "the quantities of all resources are unlimited" is incorrect. In fact, the PPC is based on the assumption of scarce resources (limited quantities of resources), which is why there are trade - offs in production.
• The option "there is no inflation in the economy" is incorrect. Inflation is a macroeconomic concept related to the general price level, and it is not an assumption for constructing the PPC, which focuses on production trade - offs with given resources and technology.

Answer:

B. technology is fixed