Figure 2-2

Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
-Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

Question

Figure 2-2
  
Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables.
-Refer to Figure 2-2.The linear production possibilities frontier in the figure indicates that

Quizplus · Accepted Answer

The linear production possibilities frontier indicates that the trade-off between producing meat and vegetables is constant. This means that Mendonca does not have a comparative advantage or disadvantage in either good and that the opportunity cost of producing one good over the other remains the same regardless of how much of each good is produced. Choice A and B cannot be determined from the information given and choice D is not correct as the production possibilities frontier is linear, not curved, indicating that it is equally expensive to produce each additional unit of meat or vegetables.

Figure 2-2 Figure 2-2 Above Shows the Production Possibilities Frontier for Mendonca