Table 1.1. U.S. Production Possibilities Curve Data
$$\begin{array} { l r r r r r r }
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. If the economy produces 4 capital goods and 10 consumer goods, the economy
A) operates at a point outside of its production possibilities schedule
B) faces excess productive capacity
C) experiences price inflation
D) has realized economic growth

Question

Table 1.1. U.S. Production Possibilities Curve Data
 $$\begin{array} { l r r r r r r } 
& \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\text { Capital goods } & 5 & 4 & 3 & 2 & 1 & 0 \
\text { Consumer goods } & 0 & 12 & 22 & 30 & 36 & 40
\end{array}$$
-Refer to Table 1.1. If the economy produces 4 capital goods and 10 consumer goods, the economy
A) operates at a point outside of its production possibilities schedule
B) faces excess productive capacity
C) experiences price inflation
D) has realized economic growth

Quizplus · Accepted Answer

The economy is not operating at its full productive capacity since it can produce 4 capital goods and 12 consumer goods (point B), but it is only producing 10 consumer goods.

Table 11 U -Refer to Table 1