Illustrate and clarify the economizing problem

Illustrate and clarify the economizing problem?

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A. Assumptions:

1. Economy is operating efficiently (full employment and full production).

2. Available supply of resources is fixed in quantity and quality at this point in time.

3. Technology is constant during analysis.

4. Economy produces only two types of products.

B. Choices will be necessary because resources and technology are fixed.

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