Question 3
Basic ConceptsOne of the limitations of PPC assumption is that there is
- A.no indication of technological development
- B.no recognition of preferred goods for countries
- C.technical inefficiency
- D.abundant resources
Show the answer and explanation
Answer: B (no recognition of preferred goods for countries)
Explanation
A production possibility curve shows all the combinations an economy can produce, but it does not show which combination the country actually prefers.