If the law of increasing opportunity cost holds, can the production possibility frontier be a straight line?
What will be an ideal response?
No. If the production possibility curve is a straight line, this would imply that the marginal rate of transformation is constant. This cannot be the case if the law of increasing opportunity costs holds.
Economics
You might also like to view...
A monopolistic competitor is like a competitive firm in the long run, because
A) it earns positive economic profits. B) it earns zero economic profits C) both firms will earn positive economic profits. D) both firms will increase price to increase profits.
Economics
Suppose the nominal interest rate charged is 5 percent and the expected inflation rate is 2 percent. Which of the following is the expected real interest rate?
a. 2 percent b. 5 percent c. 7 percent d. -3 percent e. 3 percent
Economics