When does a PPF become a straight line?
AOpportunity costs are constant
BResources are left idle
CTechnology starts to fall
DPrices are always fixed
Answer & Solution
Correct answer: A. Opportunity costs are constant
If resources can be substituted without added cost, giving up the same amount of one good yields each extra unit of the other.
Related questions
Under a production possibility curve, moving along the frontier shows what?When markets fail to produce efficient outcomes, economists call it what?Who likely introduced the macro and micro distinction in economics in 1933?Oligopolists may form cartels. What does this usually cause?A natural monopoly arises when one producer can do what?A market with only one buyer and many sellers is called what?Which market structure has many firms selling slightly different products?A duopoly is a special case of which market structure?