If a Production Possibility Frontier Is a Straight Line, It

question 59

Multiple Choice

If a production possibility frontier is a straight line, it tells us that the opportunity cost of producing one more unit of good X:

• A)is an increasing amount of good Y.
• B)is a decreasing amount of good Y.
• C)is equal to the inverse of the amount of good Y.
• D)is a constant amount of good Y.

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Definitions:

Decision Makers

Individuals or groups responsible for making choices that determine the course of actions to be followed.

Efficient

The property of resource allocation where it is impossible to make any one individual better off without making at least one individual worse off.

Marginal Benefit

Marginal benefit is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Social Cost

The total cost to society, including both private costs borne by the producer and external costs borne by others, of producing a good or service.