Question 31
Basic ConceptsUse the production possibility curve in Figure 1 to answer the question. Point S indicates that the
- A.production of capital goods is inefficient
- B.production of both goods are efficient
- C.economy is employing all its resources
- D.economy must grow to produce there
Show the answer and explanation
Answer: D (economy must grow to produce there)
Explanation
S lies outside the curve, so it can be reached only after growth.