-Two countries, Alpha and Beta, have identical production possibilities frontiers. If Alpha produces at point a and Beta produces at point b, then
A)Alpha's and Beta's economic growth rates will be the same.
B)Beta's economic growth rate will exceed Alpha's.
C)Beta's future consumption will be greater than Alpha's.
D)Alpha consumes less than Beta today, but it will grow faster than Beta.

Question

-Two countries, Alpha and Beta, have identical production possibilities frontiers. If Alpha produces at point a and Beta produces at point b, then
A)Alpha's and Beta's economic growth rates will be the same. 
B)Beta's economic growth rate will exceed Alpha's. 
C)Beta's future consumption will be greater than Alpha's. 
D)Alpha consumes less than Beta today, but it will grow faster than Beta.

Quizplus · Accepted Answer

If Alpha produces at a point that allows for more investment in capital goods compared to Beta, it sacrifices current consumption for future growth, leading to faster economic growth than Beta.

-Two Countries, Alpha and Beta, Have Identical Production Possibilities Frontiers