Question

Consider a production possibilities frontier (PPF) with good X on the horizontal axis and good Y on the vertical axis. The PPF is a straight line The PPF represents
a. increasing opportunity costs.
b. decreasing opportunity costs.
c. constant opportunity costs.
d. zero opportunity costs
e. none of the above

Answer 1

Answer:

C

Explanation:

The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.  

As more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.

If the PPF is a straight line, it means there is a constant opportunity cost no matter the point one is on the curve