With a constant opportunity cost between goods A and B,the PPF for goods A and B would
A) be a straight line.
B) be a bowed-outward line.
C) be a bowed-inward line.
D) not exist.

Question

Quizplus · Accepted Answer

When there is a constant opportunity cost between two goods, it means that every time we produce more units of one good, we have to give up the same amount of the other good. This results in a constant slope of the PPF, which will be a straight line. For example, if we have to give up 2 units of good B to produce 1 unit of good A, then the slope of the PPF will be -2/1 or -1/2, and it will be a straight line. Therefore, the correct answer is A.

With a Constant Opportunity Cost Between Goods a and B,the