Unformatted text preview: 3. False because to increase the clothing production by one unit requires only one worker whereas it takes four to create a food unit. Rather the opportunity cost of one unit of food is four units of clothing. 4. False, the production possibilities curve for this country is a straight line because the opportunity cost stays constant no matter what sector labor is diverted to. Had the opportunity cost increased as one moved towards the extremes, then the PP curve would have been concave. 5. False the opportunity cost of clothing production stays the same no matter what fraction of the labor force is concentrated on making clothing. That is why the PP curve is a straight line and not a curved (concave) line....
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This note was uploaded on 07/14/2008 for the course ECON 73100 taught by Professor Klepper during the Fall '07 term at Carnegie Mellon.
- Fall '07