Figure 2-11 Mercedes Benz produces a full line of luxury automobiles, including coupes, sedans, and SUVs, at a variety of manufacturing plants across the globe. Assume Mercedes Benz produces both coupes and SUVs at its Tuscaloosa, Alabama factory. Figure 2-11 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions at this factory.
-If additional units of a good could be produced at a constant opportunity cost, the production possibility frontier would be bowed outward (concave).

Question

Figure 2-11  Mercedes Benz produces a full line of luxury automobiles, including coupes, sedans, and SUVs, at a variety of manufacturing plants across the globe. Assume Mercedes Benz produces both coupes and SUVs at its Tuscaloosa, Alabama factory. Figure 2-11 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions at this factory.
-If additional units of a good could be produced at a constant opportunity cost, the production possibility frontier would be bowed outward (concave).

Quizplus · Accepted Answer

If additional units of a good could be produced at a constant opportunity cost, the production possibility frontier would be a straight line, not bowed outward.

Figure 2-11 Mercedes Benz Produces a Full Line of Luxury