What would a linear (straight-line) production possibilities curve intimate?
Answers:
Firms in the economy experience constant returns. So it costs them basically as much "y" to get the 1st unit of "x" as the 10th part of "x". Both their marginal costs and marginal products will be constant numeric values.
It costs them like both ways.
The above is correct, but there is something far more important here.
A straight dash PP curve would imply that machines do not wear out, regardless of use level and relatives do not get tired. It would imply an non-attendance of entropy. It would also imply that people are not satiable, that here is such a huge supply of willing labor that they would work without restrict for the same wage, never asking for overtime and valuing adjectives levels of work without convert. Likewise, it implies that he manufacturer of physical means will sell even an unlimited volume at a fixed price, regardless of their costs or capacities.
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