Answer :
Let's solve this question step-by-step by analyzing the characteristics of the production possibilities frontier (PPF) and interpreting what different points on it represent.
### Analysis of the PPF:
#### Part 1:
Characteristics of a PPF that is a straight line
- A straight-line PPF indicates that the opportunity costs are consistent across all combinations of goods produced. This means whether you produce more of good X or good Y, the rate at which one good is sacrificed for the other remains the same.
- Let's break down the options:
- Oa. increasing opportunity costs: This would typically result in a bowed-outward PPF, where more of one good requires increasingly larger sacrifices in the other good.
- Ob. decreasing opportunity costs: This would produce a concave-up PPF, which is not common in real-world economic models.
- Oc. constant opportunity costs: This precisely describes a straight-line PPF.
- Od. zero opportunity costs: This implies no trade-offs between producing different goods, which is unrealistic in the PPF context.
- Oe. none of the above: This would imply none of the given options are correct, but option Oc fits perfectly.
Based on the above analysis, the correct answer here is Oc. constant opportunity costs.
#### Part 2:
Interpretation of points relative to the PPF
- Points on the PPF represent maximum efficiency in production — all resources are fully and efficiently utilized.
- Points inside (below) the PPF represent inefficient production, where some resources are underutilized.
- Points outside (above) the PPF indicate combinations of goods that are not attainable with the current resources and technology.
Given this background, consider the following options:
- Oa. unavailable: This indicates that the combination of goods lies outside the realm of what can be produced with the available resources.
- Ob. available: This would indicate the combination is on or inside the PPF.
- Oc. representative of efficient production: This describes points that lie on the PPF.
- Od. representative of inefficient production: This describes points that lie inside the PPF.
Given the above interpretation, the point above the PPF represents a combination of goods that is unavailable with the current resources and technology.
Thus, the correct answer to this part is Oa. unavailable.
### Final Answer:
Combining both parts, the answers are:
- Part 1: Oc. constant opportunity costs.
- Part 2: Oa. unavailable.
### Analysis of the PPF:
#### Part 1:
Characteristics of a PPF that is a straight line
- A straight-line PPF indicates that the opportunity costs are consistent across all combinations of goods produced. This means whether you produce more of good X or good Y, the rate at which one good is sacrificed for the other remains the same.
- Let's break down the options:
- Oa. increasing opportunity costs: This would typically result in a bowed-outward PPF, where more of one good requires increasingly larger sacrifices in the other good.
- Ob. decreasing opportunity costs: This would produce a concave-up PPF, which is not common in real-world economic models.
- Oc. constant opportunity costs: This precisely describes a straight-line PPF.
- Od. zero opportunity costs: This implies no trade-offs between producing different goods, which is unrealistic in the PPF context.
- Oe. none of the above: This would imply none of the given options are correct, but option Oc fits perfectly.
Based on the above analysis, the correct answer here is Oc. constant opportunity costs.
#### Part 2:
Interpretation of points relative to the PPF
- Points on the PPF represent maximum efficiency in production — all resources are fully and efficiently utilized.
- Points inside (below) the PPF represent inefficient production, where some resources are underutilized.
- Points outside (above) the PPF indicate combinations of goods that are not attainable with the current resources and technology.
Given this background, consider the following options:
- Oa. unavailable: This indicates that the combination of goods lies outside the realm of what can be produced with the available resources.
- Ob. available: This would indicate the combination is on or inside the PPF.
- Oc. representative of efficient production: This describes points that lie on the PPF.
- Od. representative of inefficient production: This describes points that lie inside the PPF.
Given the above interpretation, the point above the PPF represents a combination of goods that is unavailable with the current resources and technology.
Thus, the correct answer to this part is Oa. unavailable.
### Final Answer:
Combining both parts, the answers are:
- Part 1: Oc. constant opportunity costs.
- Part 2: Oa. unavailable.
