Figure 2-7
-Refer to Figure 2-7.If this economy devotes all of its resources to the production of engines,then it will produce
A)0 engines and 40 tvs.
B)10 engines and 35 tvs.
C)40 engines and 0 tvs.
D)40 engines and 40 tvs.

Question

Figure 2-7 
-Refer to Figure 2-7.If this economy devotes all of its resources to the production of engines,then it will produce
A)0 engines and 40 tvs. 
B)10 engines and 35 tvs. 
C)40 engines and 0 tvs. 
D)40 engines and 40 tvs.

Quizplus · Accepted Answer

According to the PPC in Figure 2-7, the economy can produce either 40 engines or 40 TVs, but not both as the production possibility curve is a straight line. If the economy devotes all of its resources to the production of engines, it will produce 40 engines and 0 TVs, which is represented by point F on the PPC. Therefore, the best choice is C.

Figure 2-7 -Refer to Figure 2-7.If This Economy Devotes All of Its