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Author Question: If the law of increasing opportunity cost holds, can the production possibility frontier be a ... (Read 84 times)

P68T

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on: Jun 29, 2018
If the law of increasing opportunity cost holds, can the production possibility frontier be a straight line?
 
  What will be an ideal response?

Question 2

What is meant by the expected rate of return?
 
  What will be an ideal response?


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Jadwiga9

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Reply #1 on: Jun 29, 2018
Answer to Question 1

No. If the production possibility curve is a straight line, this would imply that the marginal rate of transformation is constant. This cannot be the case if the law of increasing opportunity costs holds.

Answer to Question 2

The expected rate of return is the annual rate of return that a firm expects to obtain through a capital investment.


P68T

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

zacnyjessica

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Reply 3 on: Yesterday
Excellent

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