Asked by Peter Carroll on Jun 08, 2024
Verified
Assume that a change in government policy results in greater production of both consumer goods and investment goods.We can conclude that:
A) the economy was not employing all of its resources before the policy change.
B) the economy's production possibilities curve has been shifted to the left as a result of the policy decision.
C) this economy's production possibilities curve is convex (bowed inward) to the origin.
D) the law of increasing opportunity costs does not apply in this society.
Production Possibilities Curve
A graphical representation illustrating the maximum output possibilities for two goods, given a set of inputs and technological efficiency.
Government Policy
Guidelines or rules established by governments to direct public action in specific areas such as health, education, and economic management.
Consumer Goods
Products and services that are used by individuals or households to satisfy their immediate wants and needs.
- Describe how advancements in technology and shifts in resources impact the production possibilities frontier.
Verified Answer
AD
Alyssa DanielleJun 14, 2024
Final Answer :
A
Explanation :
If the government policy resulted in greater production of both consumer goods and investment goods, it implies that the economy was not using all of its resources before the policy change. Therefore, the correct choice is A.
Learning Objectives
- Describe how advancements in technology and shifts in resources impact the production possibilities frontier.