The Production Possibility Frontier Has Some Basic Assumptions, What Are They?


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amber Jhon answered
There are few assumptions of production possibility frontier which are realistic for short run only. First assumption analyzes the trade-off between two goods at one time. For example, the trade-off between an agricultural and non agricultural product. Secondly, resources are same for both of the goods.

Thirdly,given fixed technology, it assumes that the increase in the production of one good will decrease the production of other good. Fourthly, given full employment, it is not possible to produce one product more without decreasing the production of other. And last assumption is that there are fixed resources and it assumes that there is no discovery of additional resources.

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