When a production possibilities frontier is linear, what does it show?
A) a truer picture of real life than a bowed-out production possibilities frontier
B) that resources are perfectly adaptable from the production of one good to another
C) an example of increasing opportunity cost
D) an example of decreasing opportunity cost

Question

Quizplus · Accepted Answer

A linear production possibilities frontier shows that resources are perfectly adaptable from the production of one good to another. This means that the opportunity cost of producing one good versus another is constant and does not increase or decrease as more of one good is produced.

When a Production Possibilities Frontier Is Linear, What Does It