Refer to the information provided in Figure 2.3 below to answer the questions that follow. Figure 2.3
-Refer to Figure 2.3. Assume that in this society the marginal rate of transformation of sailboats for surfboards is constant and equal to -10. A graph of this society's production possibility frontier will be represented by
A) A.
B) B.
C) C.
D) D.

Question

Refer to the information provided in Figure 2.3 below to answer the questions that follow.  Figure 2.3
-Refer to Figure 2.3. Assume that in this society the marginal rate of transformation of sailboats for surfboards is constant and equal to -10. A graph of this society's production possibility frontier will be represented by
A) A. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

The production possibility frontier (PPF) represents the maximum amount of two goods that can be produced with a given set of resources and technology. In this case, the slope of the PPF is constant and equal to -10, which means that the opportunity cost of producing one extra sailboat is always 10 surfboards. The graph that represents this situation is a straight line with a negative slope, as shown in option C. Any point on the PPF represents an efficient allocation of resources, where all resources are used and none are wasted. The choice of producing at point A, B or D would represent an inefficient allocation of resources, meaning that some resources are unused or wasted. The best choice would be to produce at any point on the PPF, but the specific point would depend on the society's preferences and needs.

Refer to the Information Provided in Figure 2