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jadelga3 jadelga3
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A year ago

The diagram below shows two production possibilities boundaries for Country X.

Short description: A graph plots consumer goods against capital goods. Long description: The horizontal axis represents consumer goods. The vertical axis represents capital goods. The graph plots two concave down decreasing curves. The first curve, P P B subscript 1 begins at a point on the vertical axis, passes through the points, F, A, and B, and ends at a point on the horizontal axis. The second curve, P P B subscript 2 begins at a point on the vertical axis (above the point where the first curve begins), passes through a point, E, and ends at a point on the horizontal axis (to the right of the first curve). The point, C lies near the horizontal axis and parallel to A. The point, D is to the right of point E.

FIGURE 1-4

Refer to Figure 1-4. If Country X is currently producing at point A, it could move to point B if



▸ the cost of producing capital goods were to increase.

▸ some resources were switched from the consumer goods industries to the capital goods industries.

▸ some resources were switched from the capital goods industries to the consumer goods industries.

▸ the cost of producing consumer goods were to increase.

▸ Country X is no longer able to produce the quantity of capital goods at point A.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
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mnnewmanmnnewman
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jadelga3 Author
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A year ago
You make an excellent tutor!
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Thanks for your help!!
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