(Solved): Consider the following graph that plots the production possibilities frontier model for a hypotheti ...

Consider the following graph that plots the production possibilities frontier model for a hypothetical economy that produces only two goods: rice and motorcycles. Which of the following is true regarding this economic model? In order to construct such a model, an economist would need real life data regarding countries that produce only two goods. The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts. The fact that there are only two goods produced in this theoretical economy, when, in reality, economies produce many more types of goods, means this model is generally useless. This PPF is not an economic model.