If the production possibilities frontier for two goods is shown as a straight line, this implies that
A)there is no trade-off between the two goods.
B)the principle of increasing costs is present.
C)the slope of the production possibilities frontier is increasing.
D)there are no specialized resources used in the production of these goods.

Question

Quizplus · Accepted Answer

A straight-line production possibilities frontier indicates constant opportunity costs, meaning resources are not specialized and can be easily shifted between the production of the two goods without increasing costs.

If the Production Possibilities Frontier for Two Goods Is Shown