When economists talk about a trade-off between "guns and butter," they mean:
A) Society can produce more military goods without giving up any consumer goods.
B) Military goods are an inefficient use of resources.
C) The production of more military goods may require fewer consumer goods.
D) Consumer goods are always more costly than military goods.

Question

Quizplus · Accepted Answer

The phrase "guns and butter" reflects the idea that a country has a limited amount of resources that can be used to either produce military goods (guns) or consumer goods (butter). Choosing to produce more military goods may require diverting resources away from consumer goods, resulting in fewer consumer goods being produced. Therefore, the trade-off is between producing more military goods or more consumer goods. Option A is incorrect because it assumes that resources are unlimited, which is not true in economics. Option B is incorrect because it is a value judgment, not a trade-off. Option D is incorrect because the cost of producing goods is determined by the availability of resources and the cost of production, not by the type of good being produced.

When Economists Talk About a Trade-Off Between "Guns and Butter