Use the following to answer questions:
-(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown's labour resource decreases by 40 hours,the opportunity cost of producing shirts:
A) increases.
B) decreases.
C) does not change.
D) may or may not change depending upon the number of pairs of socks it wishes to produce.

Question

Use the following to answer questions: 
-(Scenario: Linear Production Possibility Frontier)Use Scenario: Linear Production Possibility Frontier.If Largetown's labour resource decreases by 40 hours,the opportunity cost of producing shirts:
A) increases. 
B) decreases. 
C) does not change. 
D) may or may not change depending upon the number of pairs of socks it wishes to produce.

Quizplus · Accepted Answer

In a linear production possibility frontier, the opportunity cost remains constant regardless of changes in resources, as the trade-off between the two goods is constant.

Use the Following to Answer Questions