If the Production Possibility Frontier Is a Straight Line

question 137

Multiple Choice

If the production possibility frontier is a straight line:

• A)opportunity costs are constant.
• B)firms face increasing costs.
• C)firms face decreasing costs.
• D)there is no trade-off between the two goods represented.

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Definitions:

Cooperation and Self-Interest

The concept that individuals or groups may work together towards mutual benefit, driven by their own personal gain.

Oligopolistic Firms

Companies that operate in a market structure characterized by a small number of competitors dominating the industry.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often leading to market inefficiency.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of all other players in the game.