Refer to the following figures to answer the next two questions.

-Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF?
A) point A
B) point B
C) point C
D) point D
E) point E

Question

Refer to the following figures to answer the next two questions.
 
-Which allocation point in the short-run production possibilities frontier (PPF) will lead to NO GROWTH in the long-run PPF?
A) point A 
B) point B 
C) point C 
D) point D 
E) point E

Quizplus · Accepted Answer

Point A represents the maximum production of one good in the short run but it uses all available resources, leaving no room for investment in capital which is necessary for long-term growth. Therefore, point A will lead to no growth in the long-run PPF.

Note: The other options (B, C, D, E) represent points that still have unused resources in the short run, so there is potential for investment in capital and growth in the long run.

Refer to the Following Figures to Answer the Next Two