Use the following to answer questions :
Figure: Consumer and Capital Goods
-(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. The movement from curve 1 to curve 2 indicates:
A)a growing ability of the economy to produce capital and consumer goods.
B)going from unemployment to full employment.
C)a decrease in the factors of production.
D)a shift of the production possibility frontier toward producing fewer goods.

Question

Use the following to answer questions :
Figure: Consumer and Capital Goods 
-(Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. The movement from curve 1 to curve 2 indicates:
A)a growing ability of the economy to produce capital and consumer goods. 
B)going from unemployment to full employment. 
C)a decrease in the factors of production. 
D)a shift of the production possibility frontier toward producing fewer goods.

Quizplus · Accepted Answer

The movement from curve 1 to curve 2 indicates that the economy has increased its ability to produce both capital and consumer goods. This is illustrated by the increase in the quantity of both goods that can be produced at any given point. Therefore, option A is the correct choice.

Use the Following to Answer Questions