The diagram below shows two production possibilities boundaries for Country X. FIGURE 1- 3
-Refer to Figure 1- 3. Suppose that Country X is currently producing at point E. Country X could achieve production at point D if
A) firms reduced output of capital goods.
B) sufficient improvements in technology occurred in either the capital goods industry or the consumer goods industries.
C) the given resources were more efficiently employed.
D) the given resources were fully employed.
E) the prices of capital goods and consumption goods fell.

Question

The diagram below shows two production possibilities boundaries for Country X.  FIGURE 1- 3
-Refer to Figure 1- 3. Suppose that Country X is currently producing at point E. Country X could achieve production at point D if
A) firms reduced output of capital goods. 
B) sufficient improvements in technology occurred in either the capital goods industry or the consumer goods industries. 
C) the given resources were more efficiently employed. 
D) the given resources were fully employed. 
E) the prices of capital goods and consumption goods fell.

Quizplus · Accepted Answer

Production at point D would require either improvements in technology in the capital goods industry, which would increase their productivity and enable the use of fewer resources to produce the same amount of capital goods, or improvements in technology in the consumer goods industry, which would increase their productivity and enable the use of fewer resources to produce the same amount of consumer goods.

The Diagram Below Shows Two Production Possibilities Boundaries for Country