If the marginal rate of transformation is constant throughout, the production Possibilities Frontier will be
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Downward sloping and linear.
The Production Possibilities Frontier (PPF) shows the various combinations of two goods that an economy can produce using all its resources efficiently.
-
The Marginal Rate of Transformation (MRT) represents how much of one good must be given up to produce an additional unit of another good.
-
When the MRT is constant, it means the opportunity cost remains the same as we move along the PPF.
-
This happens when resources are perfectly substitutable between the production of the two goods.
Thus, the PPF will be a straight line (linear) sloping downward from left to right.