Use the following figure to answer questions: Figure 1.5
-Using Figure 1.5,if an economy has the capacity to produce represented by PP2,then point E represents
A)A constant trade-off between potato chips and doughnuts.
B)A combination of potato chips and doughnuts that is not attainable.
C)An efficient use of resources.
D)None of the choices are correct.

Question

Use the following figure to answer questions: Figure 1.5
-Using Figure 1.5,if an economy has the capacity to produce represented by PP2,then point E represents
A)A constant trade-off between potato chips and doughnuts. 
B)A combination of potato chips and doughnuts that is not attainable. 
C)An efficient use of resources. 
D)None of the choices are correct.

Quizplus · Accepted Answer

Point E represents an efficient use of resources as it is on the production possibility frontier (PPF) which shows the maximum combination of goods that can be produced using the available resources and technology.

Use the Following Figure to Answer Questions: Figure 1