A production possibilities frontier is a straight line when
a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good.
b. an economy is interdependent and engaged in trade instead of self-sufficient.
c. the rate of tradeoff between the two goods being produced is constant.
d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
c
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Transaction costs are likely to be ________ when property rights are ________ clearly defined
A) lower ; less B) higher; more C) lower; more D) Trick question: there is no causal relationship between transaction costs and property rights.
Which of the following is NOT true of the interest rate channel?
A) Bank loans play no special role. B) The Fed changes the real interest rate which affects the components of aggregate expenditures. C) Borrowers are indifferent as to how and from whom they raise funds. D) Alternative sources of funds are not substitutes for each other.