The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 3
-Refer to Figure 1- 3. If Country X, constrained by the production possibilities boundary PPB1, is currently producing at point A, it can produce more capital goods by moving to point
A) E.
B) F.
C) B.
D) C.
E) D.

Question

The diagram below shows two production possibilities boundaries for Country X.  FIGURE 1- 3
-Refer to Figure 1- 3. If Country X, constrained by the production possibilities boundary PPB1, is currently producing at point A, it can produce more capital goods by moving to point
A) E. 
B) F. 
C) B. 
D) C. 
E) D.

Quizplus · Accepted Answer

Point F is outside the production possibilities boundary PPB1, so it is not feasible for Country X to produce at that point. Point E is on the same production possibilities boundary as point A, so it is not possible to produce more capital goods by moving to that point. Point B represents a combination of goods that produces more capital goods than point A, but it also produces fewer consumer goods. Points C and D produce fewer capital goods and more consumer goods than point A. Therefore, the best choice is to move to point B in order to increase the production of capital goods while minimizing the reduction in the production of consumer goods.

The Diagram Below Shows Two Production Possibilities Boundaries for Country