Suppose that an economy produces only two goods: computers and movies. If the economy at all times utilizes all its resources, and it decides to use more of its available resources to produce computers,
A)the production of movies will drop.
B)the production of both movies and computers will drop.
C)the production of movies will rise.
D)the production of movies will not change but the production of computers will increase.
E)then will be no change in the production of either computers or movies.

Question

Quizplus · Accepted Answer

If the economy decides to use more resources to produce computers, it will have to decrease the resources used to produce movies. This is because the resources are limited and if more of them are used for computers, there will be fewer left for movies. Therefore, the production of movies will drop.

Suppose That an Economy Produces Only Two Goods: Computers and Movies