Use the following figure to answer the questions: Figure 1.6

-If an economy has the capacity to produce represented by PP1,then point E represents
A)A combination of cars and SUVs that is not attainable.
B)A constant trade-off between cars and SUVs.
C)A change in technology.
D)An efficient use of resources.

Question

Use the following figure to answer the questions: Figure 1.6

-If an economy has the capacity to produce represented by PP1,then point E represents
A)A combination of cars and SUVs that is not attainable. 
B)A constant trade-off between cars and SUVs. 
C)A change in technology. 
D)An efficient use of resources.

Quizplus · Accepted Answer

Point E represents an efficient use of resources as it is on the production possibility frontier (PPF) which shows the maximum possible combinations of cars and SUVs that can be produced with the given resources and technology. Any point on the PPF represents an efficient use of resources as all resources are being utilized to produce goods without any wastage.

Use the Following Figure to Answer the Questions: Figure 1