Using Figure 1.6,if an economy has the capacity to produce represented by PP1,then point E represents
A)A combination of cars and SUVs that is not attainable.
B)A constant trade-off between cars and SUVs.
C)A change in technology.
D)An efficient use of resources.

Question

Using Figure 1.6,if an economy has the capacity to produce represented by PP1,then point E represents
A)A combination of cars and SUVs that is not attainable. 
B)A constant trade-off between cars and SUVs. 
C)A change in technology. 
D)An efficient use of resources.

Quizplus · Accepted Answer

Point E represents an efficient use of resources because it is on the production possibilities frontier (PPF) curve of the economy, which means all available resources are being fully utilized to produce a combination of cars and SUVs.