1. The diagram above shows the production possibilities curve for an economy. Which of the following is true if the economy is currently producing at point E? (A) It is producing the maximum possible output given the scarcity of resources. (B) It is devoting most of its resources to producing Good Y. (C) It is not using its resources fully and efficiently,

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Chapter1: Making Economics Decisions
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Good
E
Good Y
1. The diagram above shows the production
possibilities curve for an economy. Which of
the following is true if the economy is
currently producing at point E?
(A) It is producing the maximum possible
output given the scarcity of resources.
(B) It is devoting most of its resources to
producing Good Y.
(C) It is not using its resources fully and
efficiently.
(D) It can increase the production of Good X
only if it decreases the production of
Good Y.
Transcribed Image Text:Good E Good Y 1. The diagram above shows the production possibilities curve for an economy. Which of the following is true if the economy is currently producing at point E? (A) It is producing the maximum possible output given the scarcity of resources. (B) It is devoting most of its resources to producing Good Y. (C) It is not using its resources fully and efficiently. (D) It can increase the production of Good X only if it decreases the production of Good Y.
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