If economic resources are perfectly interchangeable between the two products shown on a production possibilities graph:
A) The economy will always be at full employment
B) More of one product can be produced without producing less of the other product
C) The production possibilities curve would be a straight line
D) The two products are of equal value to the economy

Question

Quizplus · Accepted Answer

If economic resources are perfectly interchangeable between the two products, it means that the economy can shift production from one product to the other without any additional cost or loss of efficiency. This would result in a constant opportunity cost and a linear production possibilities curve. Therefore, the correct answer is C.

If Economic Resources Are Perfectly Interchangeable Between the Two Products