Exhibit 2-7

-Refer to Exhibit 2-7.Which of the following statements is true?

Question

Exhibit 2-7
 
-Refer to Exhibit 2-7.Which of the following statements is true?

Quizplus · Accepted Answer

If the economy's PPF is represented by PPF1, points A and B are productive efficient, while C and D are unattainable. This is because points A and B are on the PPF while points C and D are outside the PPF and cannot be produced with the available resources. Therefore, option B is the correct answer. Option A is incorrect because we cannot compare the efficiency between Point B and D to points A and C as they lie on different levels of the PPF. Option C is also incorrect because if the economy's PPF is represented by PPF2, points C and D are on the PPF and productive efficient while points A and B are outside the PPF and unattainable. Option D is incorrect because points B and D are efficient only if we consider PPF1, while points C and D are efficient only if we consider PPF2.

Exhibit 2-7 -Refer to Exhibit 2-7.Which of the Following Statements Is True