-Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas.Hotels are a capital good that,once built,will help produce still more consumption goods..According to the figure,which island will have more rapid economic growth?
A) Hawaii
B) Both Hawaii and Puerto Rico will grow at the same speed.
C) Puerto Rico
D) Neither Hawaii nor Puerto Rico will grow.
E) More than one of the above answers is correct.

Question

-Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the above figure is the PPF for hotels and consumption goods in the two areas.Hotels are a capital good that,once built,will help produce still more consumption goods..According to the figure,which island will have more rapid economic growth?
A) Hawaii 
B) Both Hawaii and Puerto Rico will grow at the same speed. 
C) Puerto Rico 
D) Neither Hawaii nor Puerto Rico will grow. 
E) More than one of the above answers is correct.

Quizplus · Accepted Answer

Puerto Rico will have more rapid economic growth if it invests in hotels, which are capital goods. Capital goods, once built, can help produce more consumption goods, leading to faster economic growth.

-Suppose Puerto Rico and Hawaii Currently Have the Same Production