Question

33% D Sun 10:5 Favorites Help . . Sylvia v marks Window learn.sumbedu Chapter 20 Lecture rces 7 25. Refer to Figure 2-2. Question Not complete Points out of Production possibilities curve Clothing Food Figure 2-2 When the economy moves from Point A to Point B in the diagram above: Select one: a. the economy begins using its resources efficiently to produce both food and clothing. b. the economy operates at its productive capacity once it reaches Point B. c. the economy increases production of both clothing and food d. All of the above occur. Check Next page Previous page

Answer 1

Any point inside the PPC reflects the inefficient use of the resources.

Any point which lies on the PPC reflects the efficient use of the resources.

In the given figure, Point A lies inside the PPC and point B lies on the PPC.

When the economy moves from Point A to Point B, the economy begins using its resources efficiently to produce both food and clothing. The economy operates at its productive capacity once it reaches Point B and economy increases production of both clothing and food.

Answer: Option (D) i.e., all of the above occur.