Exhibit 3-5
-Refer to Exhibit 3-5. If an economy operates at Point A on the production possibilities curve shown above, then:

Question

​Exhibit 3-5 
-Refer to Exhibit 3-5. If an economy operates at Point A on the production possibilities curve shown above, then:

Quizplus · Accepted Answer

Point A represents the maximum production level for food and clothing given the economy's current resources and technology. Therefore, if the economy operates at point A, it cannot increase its output of both food and clothing simultaneously without obtaining additional resources or improving its technology. It has to give up some amount of one good to produce more of the other. As a result, choice C is the best answer.

​Exhibit 3-5 -Refer to Exhibit 3-5. If an Economy Operates at Point

Exhibit 3-5 -Refer to Exhibit 3-5. If an Economy Operates at Point