Question

If an economy is operating on its production possibilities curve for consumer goods and capital goods, this means that: a. it is impossible to produce more consumer goods. b. resources cannot be reallocated between the two goods. c. it is impossible to produce more capital goods. d. more consumer goods can only be produced at the cost of fewer capital goods.

Answer 1

Answer:

d. more consumer goods can only be produced at the cost of fewer capital goods.

Explanation:

The production possibility curve is a curve that shows the two combinations of goods and services produced in an economy when its resocurces are fully employed.

To increase the production of one good, more quantity of the other good has to be given up.

The opportunity cost of production increases as more quantity of one good is produced.

In this question, to produce more consumer goods, fewer capital goods would be produced.

I hope my answer helps you