Question

An economy can produce the following combinations of goods: 50X and 0Y, 40X and 10Y, 30X and 20Y, 20X and 30Y, 10X and 40Y, and 0X and 50Y. The production possibilities frontier (PPF) for the economy is:a. concave downward because the opportunity cost of producing the 10th unit of Y isgreater than the opportunity cost of producing the first unit of Y.b. a straight (downward-sloping) line because the opportunity cost of producing the twogoods is constant.c. concave downward because the opportunity cost of producing the 40th unit of Y is lessthan the opportunity cost of producing the 10th unit of Y.d. a straight (downward-sloping) line because the opportunity cost of producing the 10thunit of X is greater than the opportunity cost of producing the 40th unit of X.e. a straight (downward-sloping) line because the opportunity cost of producing the 30thunit of Y is greater than the opportunity cost of producing the 30th unit of X.

Answer 1

Answer:

B. The PPF is a straight line because of the opportunity cost of the two goods is constant.

Explanation:

The graphic representation of the PPF is a downward line with slope -1. The trade-off is always the same, the trade-off is always 1, in the problem statement when the economy produces 10 more of the Y product, the economy stops producing 10 of product X. The cost of opportunity of the good X is always 1 of the Y.