If the production possibilities curve is a downward-sloping straight line, that would indicate
A)that society cannot decide which good it prefers
B)an absence of scarcity
C)constant opportunity cost
D)inefficiency
E)specialization

Question

Quizplus · Accepted Answer

A downward-sloping straight line indicates that there is a constant opportunity cost, meaning that the production of one good can only be increased by reducing the production of the other good at a constant rate. This indicates that resources are not infinitely available and that there is scarcity, and it does not necessarily imply inefficiency or an absence of preference for one good over another. Specialization is not indicated by the shape of the production possibilities curve.

If the Production Possibilities Curve Is a Downward-Sloping Straight Line