Answered: Budget lines and production possibility…

Business

Economics

Budget lines and production possibility curves have a common assumption of increasing opportunity costs. True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Budget lines and production possibility curves have a common
assumption of increasing opportunity costs.
True
False

Expert Solution

Step 1

Answer:

False,

The production possibility curve has increasing opportunity cost but budget lines are linear so they have a constant slope.

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