If the production possibilities curve is a straight line:
A) the two products will sell at the same market prices.
B) economic resources are perfectly substitutable between the production of the two products.
C) the two products are equally important to consumers.
D) equal quantities of the two products will be produced at each possible point on the curve.

Question

Quizplus · Accepted Answer

When the production possibilities curve is a straight line, it indicates that the economic resources can be easily shifted from one product to another without any additional cost. This implies that the resources are perfectly substitutable, making choice B the correct answer.

If the Production Possibilities Curve Is a Straight Line