Which of the following correctly characterizes the shape of a constant opportunity cost production possibilities curve?
A)A straight line indicating that the law of increasing opportunity costs applies.
B)A straight line when there is constant opportunity costs.
C)A line that curves outward when resources are perfectly adaptable in the production of different goods.
D)A line that curves inward when resources are perfectly adaptable in the production of different goods.

Question

Quizplus · Accepted Answer

A constant opportunity cost production possibilities curve is a straight line because the opportunity cost of producing one good does not change as more of another good is produced. This means that resources are not perfectly adaptable and cannot be easily switched between the production of different goods.

Which of the Following Correctly Characterizes the Shape of a Constant