Figure 2-16
-Refer to Figure 2-16.If this economy devotes all of its resources to the production of gadgets,then it will produce

Question

Figure 2-16​ 
-Refer to Figure 2-16.If this economy devotes all of its resources to the production of gadgets,then it will produce

Quizplus · Accepted Answer

According to the production possibilities curve (PPC) in Figure 2-16, the economy can produce a maximum of either 100 gadgets or 90 widgets by fully utilizing all its resources. However, if the economy decides to produce only gadgets and devotes all its resources to this task, it can produce 100 gadgets and 0 widgets, as shown by the point P on the horizontal axis of the PPC. Therefore, choice C is the best answer. Choosing any other combination of gadgets and widgets would result in a production level that is lower than what the economy is capable of achieving given its resources.

Figure 2-16​ -Refer to Figure 2-16.If This Economy Devotes All of Its

Figure 2-16 -Refer to Figure 2-16.If This Economy Devotes All of Its