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How Does an Economy Represented by a Straight-Line Production Possibilities

Question 26

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How does an economy represented by a straight-line production possibilities curve differ from one represented by a traditional production possibilities curve with a bowed shape?


A) In the economy represented by a straight-line production possibilities curve, there is no opportunity cost.
B) In the economy represented by a straight-line production possibilities curve, neither good is scarce.
C) In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply.
D) In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced.

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