Suppose Someone Finds a Production Possibilities Frontier (PPF)that Is Shaped

question 109

Multiple Choice

Suppose someone finds a production possibilities frontier (PPF) that is shaped like a straight line.What can one determine about the production of the two goods?

• A) Production of the two goods is subject to decreasing relative cost.
• B) Production of the two goods is subject to increasing relative cost.
• C) Production of the two goods is subject to constant opportunity cost anywhere along the PPF.
• D) One producer must have an absolute advantage in production.
• E) More resources will not cause the PPF to shift.

---

Definitions:

Stockholders

Individuals or entities that own one or more shares of stock in a public or private corporation, thus having an ownership interest.

Acquiring Firm

A company that purchases or takes over another company.

Economic Sense

The logic or rationale that underpins economic decisions, focusing on efficiency and outcomes in financial terms.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting reputation, brand, and other value not captured by physical assets.