Imagine two societies A and B with the production possibility curve shown in the diagram. In year t Society A produces only capital goods and Society B only butter In year t + 1 they both produce only butter. Which of the following describes both societies in year t + 1? A) A has a larger capital stock and A produces more butter. B) Both have the same capital stock but A produces more butter. C) Both have the same capital stock and both produce the same amount of butter. D) A has a larger capital stock but B produces more butter.
Imagine two societies A and B with the production possibility curve shown in the diagram. In year t Society A produces only capital goods and Society B only butter In year t + 1 they both produce only butter. Which of the following describes both societies in year t + 1? A) A has a larger capital stock and A produces more butter. B) Both have the same capital stock but A produces more butter. C) Both have the same capital stock and both produce the same amount of butter. D) A has a larger capital stock but B produces more butter.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Imagine two societies A and B with the
In year t Society A produces only capital goods and Society B only butter
In year t + 1 they both produce only butter.
Which of the following describes both societies in year t + 1?
A) A has a larger capital stock and A produces more butter.
B) Both have the same capital stock but A produces more butter.
C) Both have the same capital stock and both produce the same amount of butter.
D) A has a larger capital stock but B produces more butter.
Transcribed Image Text:175
100
Y
80
144 168
210
Butter (tons)
Capital Goods
N
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