If a production possibilities frontier is a straight line, then production occurs under conditions of
A) increasing opportunity costs.
B) constant opportunity costs.
C) decreasing opportunity costs.
D) infinite opportunity costs.
E) uncertain opportunity costs.

Question

Quizplus · Accepted Answer

A straight-line production possibilities frontier indicates that the opportunity cost of producing one good in terms of the other remains constant throughout the production possibilities curve. Therefore, there are constant opportunity costs.

If a Production Possibilities Frontier Is a Straight Line, Then