1. If resources are perfectly substitutable for producing both guns and butter, then the production possibilities curve would be a. a downward-sloping, straight line b. bowed outwards c. a horizontal, straight line d. bowed inwards ' 2. Opinion polls reveal that many people believe that the military buildup of the 19805 came at the expense of pressing domestic problems such as environmental pollution and deteriorating educational and transportation infrastructure. In short. people are becoming aware of a. ' the fallacy of composition b. the law of comparative advantage c. the opportunity costs of the arms race d. the cost disease of the service sector 3. Opportunity cost can best be dened as the . money cost of a good or service. _ b. money cost plus interest on money borrowed to buy a good or service. , c. value of the best alternative foregone when a choice is made. d. cost of the resources used to produce a good or service. a