Suppose That, in the Context of the Edgeworth Box Diagram

question 23

Multiple Choice

Suppose that, in the context of the Edgeworth box diagram in production, there are Constant returns to scale in each of the two industries and that one good is relatively Labor-intensive in its production process and the other good is relatively capital-intensive In its production process. In considering this Edgeworth box diagram and the PPF that Can be derived from it,

• A) all points on the "diagonal" of the Edgeworth box diagram will have corresponding Points on the PPF.
• B) no point on the "diagonal" of the Edgeworth box diagram will correspond to a point On the PPF.
• C) the PPF will show increasing opportunity costs.
• D) the PPF will show constant opportunity costs.

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