If a country's production possibilities boundary is drawn as a straight (downward-sloping)line it indicates
A)decreasing opportunity cost of producing more of either good.
B)the use of the scarce resources in an economy.
C)constant opportunity cost of producing more of either good.
D)an unfair distribution of resources in an economy.
E)increasing opportunity cost of producing more of either good.

Question

Quizplus · Accepted Answer

A straight line production possibilities boundary (PPB) indicates a constant opportunity cost of producing more of either good. This means that the opportunity cost of producing one good remains the same regardless of how much of that good is produced. For example, if an economy can produce either guns or butter, and the PPB is a straight line, producing one more unit of guns will always mean producing the same amount less of butter. Therefore, the tradeoff is constant and the opportunity cost is the same.

If a Country's Production Possibilities Boundary Is Drawn as a Straight