Below is a production possibilities curve involving tea and videos.

-Refer to the graph above to answer this question. Assume that the economy is producing on PPI at point A After the shift from PPI to PPII, what does point B represent?
A) An increase in the production of videos but not of tea.
B) An increase in the production of tea but not of videos.
C) A decrease in the production of tea but not of videos.
D) An increase in the production of both goods.

Question

Below is a production possibilities curve involving tea and videos.
 
-Refer to the graph above to answer this question. Assume that the economy is producing on PPI at point A After the shift from PPI to PPII, what does point B represent?
A) An increase in the production of videos but not of tea. 
B) An increase in the production of tea but not of videos. 
C) A decrease in the production of tea but not of videos. 
D) An increase in the production of both goods.

Quizplus · Accepted Answer

Point B represents an increase in the production of both goods as the shift from PPI to PPII indicates an outward shift in the production possibilities frontier, allowing for more production of both goods.

Below Is a Production Possibilities Curve Involving Tea and Videos