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

Question

Quizplus · Accepted Answer

A straight (downward-sloping) line PPF indicates a constant opportunity cost of producing more of either good, which means that the resources used to produce one good could have also been used to produce the other. Therefore, increasing production of one good means sacrificing the output of the other good in the same proportion. This implies that resources are fully employed, indicating the efficient use of scarce resources in the economy. The other options (A, C, D, E) do not accurately describe the characteristics of a straight-line PPF.

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