Consider the following combinations of guns and butter that can be produced: 0 guns,20,000 units of butter; 5,000 guns,15,000 units of butter; 10,000 guns,10,000 units of butter; 15,000 guns,5,000 units of butter; 20,000 guns,0 units of butter.The PPF between guns and butter is
A) a downward-sloping bowed-out curve.
B) a downward-sloping straight line.
C) an upward-sloping straight line.
D) It is impossible to answer this question without knowing which good would be plotted on the vertical axis.

Question

Quizplus · Accepted Answer

The combinations of guns and butter provided show a constant trade-off between producing guns and butter. For every 5,000 guns produced, 5,000 units of butter must be forgone, indicating a linear relationship and thus a downward-sloping straight line on the production possibilities frontier (PPF).

Consider the Following Combinations of Guns and Butter That Can