Figure 6.3.1
-Look at the macro production possibilities frontier in Figure 6.3.1. Which point(s) correspond to points on the long-run aggregate supply (LAS) curve?

Question

Figure 6.3.1 
-Look at the macro production possibilities frontier in Figure 6.3.1. Which point(s) correspond to points on the long-run aggregate supply (LAS) curve?

Quizplus · Accepted Answer

The long-run aggregate supply (LAS) curve represents the economy's potential output when all resources are fully employed. Points on the macro production possibilities frontier that correspond to the LAS curve are those where the economy is utilizing all its resources efficiently, without any unemployment or underutilization of resources. Points a, b, and c on the production possibilities frontier would represent such scenarios, indicating full and efficient use of resources, aligning with the concept of the LAS curve.

Figure 6.3.1 -Look at the Macro Production Possibilities Frontier in Figure 6.3.1