Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the questions that follow. Figure 2.2
-Refer to Figure 2.2. If Microland's economy is at Point A, it could produce more consumer goods
A) without sacrificing any capital goods.
B) by sacrificing some capital goods.
C) only with technological improvements.
D) only with additional resources.

Question

Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the questions that follow.  Figure 2.2
-Refer to Figure 2.2. If Microland's economy is at Point A, it could produce more consumer goods
A) without sacrificing any capital goods. 
B) by sacrificing some capital goods. 
C) only with technological improvements. 
D) only with additional resources.

Quizplus · Accepted Answer

At Point A, the economy is operating below the production possibilities curve, meaning there are unused resources. To produce more consumer goods, some of these unused resources can be allocated towards consumer goods production, but this will come at the expense of producing fewer capital goods. Therefore, the economy could produce more consumer goods by sacrificing some capital goods (Choice B).

Refer to the Information Provided in Figure 2