Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives)
South Cantina Production possibilities (alternatives)
Refer to the above tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:
A)North Cantina is fully and efficiently using its resources, but South Cantina is not.
B)South Cantina is fully and efficiently using its resources, but North Cantina is not.
C)neither South Cantina nor North Cantina are fully and efficiently using their resources.
D)both South Cantina and North Cantina are fully and efficiently using their resources.

Question

Production possibilities tables for two countries, North Cantina and South Cantina: North Cantina Production possibilities (alternatives)
  South Cantina Production possibilities (alternatives)
 Refer to the above tables.Suppose that North Cantina is producing 2 units of capital goods and 17 units of consumer goods while South Cantina is producing 2 units of capital goods and 21 units of consumer goods.We can conclude that:
A)North Cantina is fully and efficiently using its resources, but South Cantina is not. 
B)South Cantina is fully and efficiently using its resources, but North Cantina is not. 
C)neither South Cantina nor North Cantina are fully and efficiently using their resources. 
D)both South Cantina and North Cantina are fully and efficiently using their resources.

Quizplus · Accepted Answer

Both North Cantina and South Cantina are producing 2 units of capital goods, which is their maximum potential, so they are fully utilizing their resources in terms of capital goods. However, North Cantina is only producing 17 units of consumer goods while it could produce up to 22 units (as seen in the table), so it is not fully utilizing its resources in terms of consumer goods. South Cantina, on the other hand, is producing 21 units of consumer goods, which is its maximum potential, and thus fully utilizing its resources in terms of consumer goods. Therefore, the correct answer is B.

Production Possibilities Tables for Two Countries, North Cantina and South