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-(Figure: Guns and Butter)Use Figure: Guns and Butter.Suppose the economy produced 8 guns and 12 pounds of butter per period.Given that,which statement is TRUE?
A)This is a possible choice,but it is inefficient.
B)This combination invalidates the notion of increasing opportunity cost.
C)The economy is still efficient but does not buy as much as it could.
D)Something must be done to reduce the amount of employment.

Question

Use the following to answer question:

-(Figure: Guns and Butter)Use Figure: Guns and Butter.Suppose the economy produced 8 guns and 12 pounds of butter per period.Given that,which statement is TRUE?
A)This is a possible choice,but it is inefficient. 
B)This combination invalidates the notion of increasing opportunity cost. 
C)The economy is still efficient but does not buy as much as it could. 
D)Something must be done to reduce the amount of employment.

Quizplus · Accepted Answer

This point lies inside the production possibility curve, which means that it is possible but not efficient. This is because more of both goods can be produced without sacrificing any quantity of the other.

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