If the production possibilities curve is a straight line, then:
A) The opportunity cost of producing one good is zero
B) The law of increasing opportunity costs does not apply
C) The society can produce more of both goods simultaneously
D) The society is capable of producing only one of the goods and not the other

Question

Quizplus · Accepted Answer

The production possibilities curve is a straight line when the opportunity cost of producing one good remains constant as more of that good is produced. This means that the law of increasing opportunity costs does not apply in such a scenario, making option B the correct choice. However, it does not necessarily mean that the society can produce more of both goods simultaneously or is capable of producing only one of the goods and not the other.

If the Production Possibilities Curve Is a Straight Line, Then