<P> Such a two - good world is a theoretical simplification because of the difficulty of graphical analysis of multiple goods . If we are interested in one good, a composite score of the other goods can be generated using different techniques . Furthermore, the production model can be generalised using higher - dimensional techniques such as Principal Component Analysis (PCA) and others . </P> <P> From a starting point on the frontier, if there is no increase in productive resources, increasing production of a first good entails decreasing production of a second, because resources must be transferred to the first and away from the second . Points along the curve describe the tradeoff between the goods . The sacrifice in the production of the second good is called the opportunity cost (because increasing production of the first good entails losing the opportunity to produce some amount of the second). Opportunity cost is measured in the number of units of the second good forgone for one or more units of the first good . </P> <P> In the context of a PPF, opportunity cost is directly related to the shape of the curve (see below). If the shape of the PPF curve is a straight - line, the opportunity cost is constant as production of different goods is changing . But, opportunity cost usually will vary depending on the start and end points . In the diagram on the right, producing 10 more packets of butter, at a low level of butter production, costs the loss of 5 guns (shown as a movement from A to B). At point C, the economy is already close to its maximum potential butter output . To produce 10 more packets of butter, 50 guns must be sacrificed (as with a movement from C to D). The ratio of gains to losses is determined by the marginal rate of transformation . </P> <P> The slope of the production--possibility frontier (PPF) at any given point is called the marginal rate of transformation (MRT). The slope defines the rate at which production of one good can be redirected (by reallocation of productive resources) into production of the other . It is also called the (marginal) "opportunity cost" of a commodity, that is, it is the opportunity cost of X in terms of Y at the margin . It measures how much of good Y is given up for one more unit of good X or vice versa . The shape of a PPF is commonly drawn as concave to the origin to represent increasing opportunity cost with increased output of a good . Thus, MRT increases in absolute size as one moves from the top left of the PPF to the bottom right of the PPF . </P>

What happens if the ppf is a straight line
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