Refer to the above diagram.If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:
A)a shift of the curve from AB to CD.
B)a movement from point 3 to point 1.
C)a movement from point 2 to point 4.
D)point 5 in the diagram.

Question

Refer to the above diagram.If there is a movement away from the full employment of resources in an economy with production possibilities curve AB, this can be shown by:
A)a shift of the curve from AB to CD. 
B)a movement from point 3 to point 1. 
C)a movement from point 2 to point 4. 
D)point 5 in the diagram.

Quizplus · Accepted Answer

A movement away from the full employment of resources in an economy with production possibilities curve AB can be shown by a movement from point 2 to point 4, as this represents a decrease in the production of one good (represented by the movement towards the y-axis) and an increase in the production of the other good (represented by the movement towards the x-axis). A shift of the curve from AB to CD would represent a change in the economy's overall level of resources or technology, and a movement from point 3 to point 1 would represent a movement towards full employment of resources, rather than a movement away from it. Point 5 is not relevant to the question.

Refer to the Above Diagram