If Marginal Rate of Technical Substitution (MRTS) is constant, then Production Possibility Curve will be :

Question

Accepted Answer

The correct answer is Option 3: "downward sloping straight line." Let's explore why this is the correct choice and why the other options are incorrect.

### Explanation for Option 3:

1. **Marginal Rate of Technical Substitution (MRTS):** MRTS refers to the rate at which one input can be substituted for another in the production process while keeping the output level constant. When MRTS is constant, it implies that the inputs are perfect substitutes for each other.

2. **Production Possibility Curve (PPC):** The PPC represents the maximum possible output combinations of two goods that an economy can achieve, given its resources and technology.

3. **Constant MRTS and PPC Shape:** When MRTS is constant, it indicates that the opportunity cost of producing one good in terms of the other remains unchanged. This results in a linear relationship between the two goods, leading to a straight-line PPC. The straight line is downward sloping because producing more of one good requires sacrificing some quantity of the other good, reflecting the trade-off between the two goods.

### Why Other Options are Incorrect:

1. **Option 1: Downward sloping concave**
   - A concave PPC indicates increasing opportunity costs, where the MRTS is not constant. As more of one good is produced, increasingly larger amounts of the other good must be sacrificed. This is contrary to the condition of a constant MRTS.

2. **Option 2: Downward sloping convex**
   - A convex PPC would imply decreasing opportunity costs, which is not typically observed in standard economic models. Moreover, a constant MRTS does not lead to a convex curve; it leads to a straight line.

3. **Option 4: Horizontal line parallel to X-axis**
   - A horizontal line would suggest that one good can be produced without sacrificing any quantity of the other good, which contradicts the concept of opportunity cost and trade-offs inherent in the PPC. This scenario does not align with the condition of a constant MRTS.

In conclusion, the correct answer is Option 3: "downward sloping straight line," because a constant MRTS implies perfect substitutability between inputs, resulting in a linear trade-off between the two goods on the PPC.