If the production possibilities frontier between two goods is a straight line,then the
A)opportunity cost is not a ratio.
B)line does not qualify as a production possibilities frontier because the unattainable production points are too close to the inefficient production points.
C)resources are equally productive in both goods.
D)Both answers A and C are correct.
E)Both answers A and B are correct.

Question

Quizplus · Accepted Answer

A straight line production possibilities frontier implies that resources are equally productive in both goods. Opportunity cost is still a ratio even with a straight line PPF. Option B is incorrect as a straight line production possibilities frontier can still have unattainable production points that are far from the inefficient production points. Option A is incorrect because opportunity cost is still a ratio even in the presence of a straight line PPF.

If the Production Possibilities Frontier Between Two Goods Is a Straight