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Question

If the marginal (additional) opportunity cost is constant, then the PPC would be __________.

A
convex to the origin
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B
straight line
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C
backward bending
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D
concave to the origin
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Solution

The correct option is A straight line

The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. Therefore, if marginal opportunity cost remains constant then PPC will be a straight line owing to constant slope.


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