A downward-sloping straight-line production possibilities frontier indicates:
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 production possibilities frontier indicates constant opportunity cost. This means that in order to produce more of one good, society must give up an increasingly larger amount of the other good. The slope of the line indicates the rate at which the opportunity cost is increasing. The fact that the line is straight indicates that the rate at which the opportunity cost is increasing is constant.

A Downward-Sloping Straight-Line Production Possibilities Frontier Indicates