FIGURE 2-9

-Refer to Figure 2-9. If an economy operates at Point A on the production possibilities curve, then which of the following statements is accurate?

Question

FIGURE 2-9
 
-Refer to Figure 2-9. If an economy operates at Point A on the production possibilities curve, then which of the following statements is accurate?

Quizplus · Accepted Answer

Point A on the production possibilities curve represents the maximum output of both food and clothing that the economy can produce given its resources and technology. Therefore, it cannot increase its output of one good without reducing its output of the other. However, it can choose to produce at any point along the curve, including points above or below point A. If it produces below the curve, it is utilizing its resources inefficiently.

FIGURE 2-9 -Refer to Figure 2-9. If an Economy Operates at Point