What Does a Straight-Line Production Possibilities Curve Illustrate

question 4

Multiple Choice

What does a straight-line production possibilities curve illustrate?

• A) The opportunity cost of production does not vary along the curve.
• B) The output combinations along the curve provide equal levels of satisfaction to consumers.
• C) The opportunity cost of production of the good on the Y-axis increases as you move down along the curve.
• D) The market price of the two goods is the same everywhere along the curve.

---

Definitions:

Partnership Account

A financial account held in the name of a partnership for the purpose of managing the partnership's funds.

Partnership

A business entity created when two or more persons collaborate to operate a business and share its profits, losses, and responsibilities.

Transferable Interest

An ownership interest in an entity that can be transferred or sold to another party, subject to any restrictions in the entity's governing documents.

Distributions

Payments made by a business to its stakeholders from its profit or assets.