The slope of the production possibilities curve is positive if there is free trade.

Question

Quizplus · Accepted Answer

The slope of the production possibilities curve is determined by the opportunity cost of producing one good in terms of the other. Free trade can affect the levels of production and consumption, but it does not necessarily change the opportunity cost relationship between the two goods. Therefore, the slope of the production possibilities curve remains constant, and it is not necessarily positive.

The Slope of the Production Possibilities Curve Is Positive If