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Question

Production Possibility Curve (PPC) will be a straight line when __________.

A
opportunity cost of addition unit is constant
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B
opportunity cost of addition unit is faffing
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C
opportunity cost of addition unit is increasing
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D
None of these
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Solution

The correct option is A opportunity cost of addition unit is constant
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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