Zetaland produces widgets and gadgets.At current levels of output,it can produce more of both.We can conclude that:

Question

Quizplus · Accepted Answer

If Zetaland can produce more of both widgets and gadgets, it means that some resources are not being utilized, and therefore, there is scope for increasing production without increasing costs. This indicates that the economy is operating inside the production possibility frontier (PPF), and there is potential for increasing output by allocating the unused resources effectively. Option A cannot be correct since if the economy was at full employment, it would not be possible to produce more widgets and gadgets without utilizing additional resources. Option B is not relevant since it is not clear what the opportunity cost is in this scenario. Option D is incorrect since the statement only mentions that output can be increased, but it is not clear whether the economy is on the PPF or not.

Zetaland Produces Widgets and Gadgets