-Two countries, Alpha and Beta, have identical production possibilities frontiers illustrated above. If Alpha produces at point a and Beta produces at point b, then
A) Beta's economic growth rate will exceed Alpha's.
B) Alpha consumes less than Beta today, but it will grow faster than Beta.
C) Alpha's and Beta's economic growth rates will be the same.
D) Beta's future consumption will be greater than Alpha's.

Question

-Two countries, Alpha and Beta, have identical production possibilities frontiers illustrated above. If Alpha produces at point a and Beta produces at point b, then
A) Beta's economic growth rate will exceed Alpha's. 
B) Alpha consumes less than Beta today, but it will grow faster than Beta. 
C) Alpha's and Beta's economic growth rates will be the same. 
D) Beta's future consumption will be greater than Alpha's.

Quizplus · Accepted Answer

Alpha is likely investing more in capital goods than Beta (assuming point a represents more capital goods production and point b more consumer goods), which typically leads to higher economic growth in the future.

-Two Countries, Alpha and Beta, Have Identical Production Possibilities Frontiers