Which of the following correctly characterizes the shape of a constant opportunity cost production possibilities curve?
A)A straight line indicating that the law of increasing opportunity costs applies.
B)A straight line when there is constant opportunity costs.
C)A line that curves outward when resources are perfectly adaptable in the production of different goods.
D)A line that curves inward when resources are perfectly adaptable in the production of different goods.

Question

Quizplus · Accepted Answer

A constant opportunity cost production possibilities curve is a straight line because the opportunity cost of producing one good remains constant as the other good is produced. The shape of the curve does not indicate the adaptability of resources or the applicability of the law of increasing opportunity costs.

Which of the Following Correctly Characterizes the Shape of a Constant