A downward-sloping straight-line production possibilities frontier indicates _____

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A downward-sloping production possibilities frontier indicates that there is a tradeoff between producing one good and another. This implies that the opportunity cost of producing more of one good is increasing as more of it is produced. Therefore, the production possibilities frontier is curved, indicating a changing opportunity cost. However, if the production possibilities frontier is a straight-line, the opportunity cost must be constant, meaning that the resources used to produce each good are equally well-suited to producing either good. This is the case when resources are homogenous and can be easily shifted between producing one good and another.

A Downward-Sloping Straight-Line Production Possibilities Frontier Indicates _____