Question

It is possible for an economy to increase its production of computers and, at the same time, to increase its production of cars if the economy Select one:

a. moves downward and to the right along its production possibilities frontier and the frontier is bowed outward.
b. moves upward and to the left along its production possibilities frontier and the frontier is bowed outward.
c. moves in either direction along its production possibilities frontier and the frontier is a straight line.
d. moves from a situation of inefficient production to a situation of efficient production. Check

Answer 1

The correct answer is option d.

Step-by-step explanation:

A production possibility curve shows the maximum possible combination of two goods that can be produced using the given resources. Points below the curve show attainable but inefficient bundles as all the resources are not being utilized. The points on the curve show efficient bundle.

On the curve, we cannot increase the production of one good without decreasing the production of others. But an economy can increase the production of both the good if it moves from an inefficient point below the curve to a point on the curve. This can be done by utilizing the resources efficiently.