The economy was at point A producing 100X and 200Y.It moved to point B where it produces 200X and 300Y.It follows that
A) point A may have been a point below the economy's PPF,while point B may lie on the PPF.
B) the economy's PPF could have shifted outward and point A was a point on the economy's old PPF.
C) the economy has moved from one point on its PPF to another point on the same PPF.
D) a or b
E) a or c

Question

Quizplus · Accepted Answer

The increase in production of both goods X and Y from point A to point B could be due to either the economy moving from a point below its Production Possibility Frontier (PPF) to a point on the PPF (indicating more efficient use of resources) or the PPF itself shifting outward (indicating an increase in the economy's capacity to produce), making both A and B correct explanations.

The Economy Was at Point a Producing 100X and 200Y