FIGURE 2-3

-Refer to Figure 2-3. Which of the following movements will result in a decrease in the production of capital goods but an increase in the production of consumption goods this period?

Question

FIGURE 2-3
 
-Refer to Figure 2-3. Which of the following movements will result in a decrease in the production of capital goods but an increase in the production of consumption goods this period?

Quizplus · Accepted Answer

Moving from Point C to Point E represents a movement along the production possibilities frontier, from producing more capital goods to more consumption goods. This trade-off results in a decrease in the production of capital goods but an increase in the production of consumption goods this period. The other movements would result in opposite effects, with an increase in capital goods and a decrease in consumption goods.

FIGURE 2-3 -Refer to Figure 2-3. Which of the Following Movements Will