If the production possibilities curve is a straight line,
A)the two goods will sell at the same market prices.
B)economic resources are perfectly substitutable between the production of the two goods.
C)the two goods are equally important to consumers.
D)equal quantities of the two goods will be produced at each possible point on the curve.

Question

Quizplus · Accepted Answer

A straight-line production possibilities curve indicates that the opportunity cost of producing one good in terms of the other is constant, implying that resources are perfectly substitutable between the production of the two goods.

If the Production Possibilities Curve Is a Straight Line