If the production possibilities frontier between bottled water and water in a jug is a straight line,which of the following statements would be correct?
A)There is no tradeoff between the two goods.
B)Resources are equally productive at producing either product.
C)A large amount of unemployment must exist.
D)There is no decrease in the production of one good when the production of the other is increased.
E)Producing more of one good gives the economy a free lunch.

Question

Quizplus · Accepted Answer

A straight-line production possibilities frontier indicates constant opportunity costs, meaning resources are equally productive at producing either product.

If the Production Possibilities Frontier Between Bottled Water and Water