The conversation between human and AI assistant.
Under what circumstances would the production possible curve bowed in towards the origin?
That makes sense. Can you give me an example of a production possibility curve that is linear instead of bowed-out?
Yes! If we had a situation where resources were equally efficient in producing both types of goods, we would see a linear production possibility curve. In this case, the opportunity cost of producing one good would remain constant as we produce more of it. For example, consider a factory that is equally adept at producing televisions and radios. The factory might be able to produce, say, 100 televisions per day and 100 radios per day. If the factory decides to produce more televisions, say 150 instead of 100, it would have to give up some of its radio production to do so. The opportunity cost of producing 50 additional televisions would be the 50 radios that the factory could have produced instead. This opportunity cost remains constant for all levels of production, resulting in a straight-line production possibility curve.