Suppose an economy produces only two goods, computers and TVs. If the economy operates at a point on its production possibilities curve, it can produce more computers only if
A) it also produces more TVs.
B) it charges more for TVs.
C) it shifts to a point inside its production possibilities curve.
D) it produces fewer TVs.

Question

Quizplus · Accepted Answer

The production possibilities curve represents the maximum output combinations of two goods that an economy can achieve. To produce more of one good, the economy must produce less of the other, assuming resources are fully utilized.

Suppose an Economy Produces Only Two Goods, Computers and TVs