A medical clinic has 10 workers. Each worker can produce a maximum of either 2 units of medical services or 5 units of secretarial services a day. The production possibilities frontier of this firm would show

Question

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The production possibilities frontier (PPF) of this firm would show a constant opportunity cost because the tradeoff between producing medical services and secretarial services is constant regardless of the levels of production. This is because the skills needed to produce each service are not interchangeable and, therefore, the opportunity cost of producing one service is constant relative to the other. As such, the PPF would be a straight line, indicating a constant tradeoff between the two types of services. The best choice is C because it accurately reflects the production possibilities for this firm.

A Medical Clinic Has 10 Workers