If the Production Possibilities Curve Is a Straight Line

question 156

Multiple Choice

If the production possibilities curve is a straight line:

• A)​opportunity costs increase as output of either commodity is expanded.
• B)​resources are not equally substitutable between the production of the goods.
• C)​opportunity costs are negative.
• D)​as an increasing quantity of resources are shifted from one manufacturing process (good Y) to another (good X), there is no increase in opportunity cost.

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Definitions:

Subjective Risk

The perceived level of risk based on an individual's personal judgment, as opposed to objectively measured risk.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that has priority over common stock dividends.

Market Risk Premium

The additional return an investor expects for holding a risky market portfolio instead of risk-free assets.

Dividend Amount

The cash value paid out to shareholders from a company's earnings.