Question

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is___________.

Answer 1

If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is a straight down sloping line.

Explanation:

The cumulative production output of two products with a given input value is determined by the production potential curve. Every point in the curve indicates how much of every good is generated as resources transfer from more than one good to lesser. The input is a mixture of the four means of production.

The type of a PPF is generally derived from the source as a function of an additional cost of production and a better value. As the PPF is shifted from the top left to both the lower right corner of the PPF, MRT is therefore decreased in absolute size.

Answer 2

Answer: It is a straight downward sloping line.

Explanation: Production Possibility Curve is the graphical representation of two goods an economy can produce , given resources and technology ,

It is always downward sloping because - given same resources and technology ; if the economy has to increase production of one good , it will have to reduce the production of other good.

In general sense , it is concave (outward buldging) because of falling Marginal Rate of Tranformation based on the assumption 'resources are not equally efficient in production of all goods' . When resources are shifted from production of more efficient good to less efficient , the amount of good sacrifised to attain an addiitional gained good increases with each succesive production shift .

However , if Opportunity cost (good sacrifised to attain the other good) i.e Marginal Rate of Transformation remains constant - it will be a downward sloping straught line.