Question

Which of the following statements is false?If there are only two goods, guns and butter, it is possible to produce more of both goods through economic growth.If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an inefficient point.If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an efficient point.If there are only two goods, guns and butter, producing more of one means producing less of the other if the economy is currently operating at an efficient point.

Answer 1

If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an efficient point.

Step-by-step explanation:

As when an economy is at an efficient point then, the economy will tend to indulge in producing the commodity in which it has an absolute advantage and thus, will later on trade in order to be better off.

In the given instance, the economy is efficient and since the nature of both the goods guns and butter are completely different, thus the economy will produce more of any single product to gain competitive advantage in that product.

Thus, efficient economy also cannot produce both the goods.