A production possibilities frontier will be a straight line if
A)increasing the production of one good by x units entails no opportunity cost in terms of the other good.
B)increasing the production of one good by x units entails a constant opportunity cost in terms of the other good.
C)the economy is producing efficiently.
D)the economy is engaged in trade with at least one other economy.

Question

Quizplus · Accepted Answer

A straight line PPF indicates constant opportunity cost when producing more of one good means sacrificing a constant amount of the other good. Choice A would result in a bowed-out PPF, while choices C and D are not directly related to the shape of the PPF.

A Production Possibilities Frontier Will Be a Straight Line If