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-(Figure: Strawberries and Submarines)Use Figure: Strawberries and Submarines.Suppose the economy is operating at point G.This implies that:
A)the economy can move to a point such as C only if it improves its technology.
B)the economy has unemployment and/or inefficiently allocates resources.
C)the economy lacks the resources to achieve a combination such as C.
D)people in this economy don't really like strawberries or submarines.

Question

Use the following to answer question:

-(Figure: Strawberries and Submarines)Use Figure: Strawberries and Submarines.Suppose the economy is operating at point G.This implies that:
A)the economy can move to a point such as C only if it improves its technology. 
B)the economy has unemployment and/or inefficiently allocates resources. 
C)the economy lacks the resources to achieve a combination such as C. 
D)people in this economy don't really like strawberries or submarines.

Quizplus · Accepted Answer

Point G is inside the production possibilities frontier, indicating that the economy is not using all of its resources efficiently, which can result in unemployment and/or inefficient allocation of resources. Therefore, choice B is the correct answer. Choice A is not necessarily true, as the economy may be able to move to a point such as C through a more efficient use of its current technology. Choice C is also not necessarily true, as the economy may have the resources but is not using them efficiently. Choice D is irrelevant to the analysis of the production possibilities frontier.

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