Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods.
Table 2.2
-Refer to Table 2.2. Identify the correct statement.
A) The best the economy can do is to produce 10 units of capital goods and 4 units of consumer goods.
B) If the economy produces 10 units of capital goods, it has sufficient resources to produce 4 units of consumer goods.
C) If the economy produces 10 units of capital goods and no units of consumer goods, there is unemployment.
D) If the economy produces 4 units of capital goods, it can manage to produce only 3 units of consumer goods.
E) In order to produce the 10th unit of capital goods, 4 units of consumer goods must be forgone.
Correct Answer:
Verified
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