In autarky a nation maximizes its welfare by choosing a point of production
A)on its production frontier,where the community indifference curve is tangent to the production frontier
B)on the production frontier which is on one of the two axes
C)inside the production frontier
D)outside the production frontier

Question

Quizplus · Accepted Answer

In autarky, where a nation has no trade with other nations, it must produce at a point on its production frontier to maximize welfare. The optimal point is where the community indifference curve is tangent to the production frontier, which represents the point where the nation is producing the most goods and services given its limited resources. Therefore, choice A is the best option.

In Autarky a Nation Maximizes Its Welfare by Choosing a Point