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JAMB Economics 1997 Question 11

Question 11

Basic Concepts

Use the diagram to answer the question. The current stage of the economy is depicted in curve I.
Point P suggests that the economy is

Diagram for this question
  1. A.reaching full employment but not full production
  2. B.attaining full production but not full employment
  3. C.under capitalized
  4. D.attaining both full employment and full production.
Show the answer and explanation

Answer: D (attaining both full employment and full production.)

Explanation

Any point on a production possibility curve shows the economy using all its resources fully and efficiently; P is on curve I, so there is full employment and full production.