The figure given below shows the production possibilities frontier for mufflers and socks. If society moves from point c to point d, then society:

A) gains 100 socks.
B) loses 30 mufflers.
C) is worse off after the change in production.
D) is not operating efficiently.
E) experiences some unemployment of resources.

Question

The figure given below shows the production possibilities frontier for mufflers and socks. If society moves from point c to point d, then society:

A) gains 100 socks. 
B) loses 30 mufflers. 
C) is worse off after the change in production. 
D) is not operating efficiently. 
E) experiences some unemployment of resources.

Quizplus · Accepted Answer

Moving from point c to point d involves producing more socks and fewer mufflers, resulting in a loss of 30 mufflers. Therefore, option B is the correct answer. Option A is incorrect because there is no information provided to suggest an increase in sock production of 100 units. Option C is incorrect because we do not have any information about the effect of the change on societal welfare. Option D is incorrect because we cannot determine the production efficiency of society from the given information. Option E is incorrect because there is no information suggesting the occurrence of unemployment.

The Figure Given Below Shows the Production Possibilities Frontier for Mufflers