A straight- line production possibilities boundary differs from a concave boundary in which of the following ways?
A)The concave boundary illustrates constant opportunity costs, whereas the straight- line boundary illustrates decreasing opportunity costs.
B)The straight- line boundary illustrates constant opportunity costs, whereas the concave boundary illustrates increasing opportunity costs.
C)A straight- line boundary is associated with a command economy, whereas a concave boundary is associated with a free- market economy.
D)The straight- line boundary does not show scarcity, whereas the concave boundary does.
E)The straight- line boundary shows opportunity cost, whereas the concave boundary does not.

Question

Quizplus · Accepted Answer

A straight-line production possibilities boundary illustrates constant opportunity costs because resources are equally efficient in producing both goods, whereas a concave boundary illustrates increasing opportunity costs because as more of one good is produced, increasing amounts of the other good must be given up, thus making the opportunity cost of producing the additional units of the first good higher.

A Straight- Line Production Possibilities Boundary Differs from a Concave