When Will a Production Possibilities Frontier Be Linear and Not

question 33

Multiple Choice

When will a production possibilities frontier be linear and not bowed out?

• A) if no tradeoffs exist
• B) if the tradeoff between the two goods is always at a constant rate
• C) if unemployment is zero
• D) if resources are allocated efficiently

---

Definitions:

Agency Relationship

A legal and fiduciary bond between two parties where one, the agent, is authorized to act on behalf and represent the interests of the other, the principal.

Terminated

The condition of being brought to an end or concluded, often referring to contracts, employment, or agreements.

Insolvency

The state of being unable to pay debts as they fall due or having liabilities exceed assets.

Principal

The party that an agent’s authority can bind or act on behalf of.