Assume an economy is operating on its production possibility frontier,which shows the production of military and civilian goods.If the output of military goods is increased,the output of civilian goods:
A)will increase,too.
B)will not change.
C)must decrease.
D)may increase or decrease.

Question

Quizplus · Accepted Answer

If the economy is already operating on its production possibility frontier, then any increase in the production of one good requires a decrease in the production of the other good, since resources are limited. Therefore, if the output of military goods is increased, the output of civilian goods must decrease in order to remain on the production possibility frontier.

Assume an Economy Is Operating on Its Production Possibility Frontier,which