Constant Opportunity Costs    To the right, we show another example of constant opportunity costs leading to a linear PPF. Suppose, our small furniture factory makes small oak tables as well as oak chairs. Further suppose, these small tables require exactly 4 times the labor and materials to be produced as does a chair. This would mean that the opportunity cost of tables in terms of chairs is 4. In other words, for each table the firm produces, it must reduce the production of chairs by 4. Or, stated from the opposite perspective, for each chair the factory produces it must reduce table production by 1/4. Thus, the PPF to the right has a slope of - 1/4.

   All the points along the PPF are feasible, and all the points below the PPF represent under-employed or unemployed resources, while all the points above the PPF are unattainable. As with all the other PPFs we have seen, linear PPFs can shift out or back, and can shift along a single axis, for the same reasons as curved PPFs. We also cannot say which points should be preferred, except that for outcomes below the PPF; we can say that those outcomes which have more of both goods should be preferred.

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