A straight-line production possibilities curve has
A) an increasing opportunity cost between the two goods.
B) a decreasing opportunity cost between the two goods.
C) a constant opportunity cost between the two goods.
D) no opportunity cost between the two goods.

Question

Quizplus · Accepted Answer

A straight-line production possibilities curve implies a constant opportunity cost between the two goods. This means that the resources used to produce one good can be easily switched to produce the other good without any additional cost. Therefore, the opportunity cost of producing one good over the other remains constant along the production possibilities curve.

A Straight-Line Production Possibilities Curve Has