Production possibilities tables for two countries,North Cantina and South Cantina:
North Cantina Production possibilities (alternatives)
South Cantina Production possibilities (alternatives)

-Refer to the above tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:
A) North Cantina is fully and efficiently using its resources,but South Cantina is not.
B) South Cantina is fully and efficiently using its resources,but North Cantina is not.
C) neither South Cantina nor North Cantina are fully and efficiently using their resources.
D) both South Cantina and North Cantina are fully and efficiently using their resources.

Question

Production possibilities tables for two countries,North Cantina and South Cantina:
North Cantina Production possibilities (alternatives)
  South Cantina Production possibilities (alternatives)
 
-Refer to the above tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:
A) North Cantina is fully and efficiently using its resources,but South Cantina is not. 
B) South Cantina is fully and efficiently using its resources,but North Cantina is not. 
C) neither South Cantina nor North Cantina are fully and efficiently using their resources. 
D) both South Cantina and North Cantina are fully and efficiently using their resources.

Quizplus · Accepted Answer

North Cantina's production possibilities indicate that it could produce either 2 units of capital goods and 20 units of consumer goods or 3 units of capital goods and 17 units of consumer goods. Since it is producing 2 units of capital goods and 17 units of consumer goods, it is not fully utilizing its resources. On the other hand, South Cantina's production possibilities indicate that it could produce either 2 units of capital goods and 23 units of consumer goods or 3 units of capital goods and 21 units of consumer goods. Since it is producing 2 units of capital goods and 21 units of consumer goods, it is utilizing its resources efficiently. Therefore, the correct answer is B.

Production Possibilities Tables for Two Countries,North Cantina and South Cantina