A straight-line production-possibilities curve:
A) shows increasing opportunity costs as the production of one commodity increases.
B) is impossible in the real world.
C) assumes that the law of diminishing returns does not apply in this case.
D) is drawn when identical products are labeled on each axis.

Question

Quizplus · Accepted Answer

A straight-line production-possibilities curve indicates constant opportunity costs, which implies that the law of diminishing returns does not apply in this scenario.

A Straight-Line Production-Possibilities Curve