The Following Question Are Based on the Following Diagram

question 24

Multiple Choice

The following question are based on the following diagram:

-If the economy currently produces 4 million units of consumer goods and 2 million units of defense goods

• A) it is operating on its production possibilities curve.
• B) there must be unemployment of resources.
• C) it is producing a combination that requires more resources than it has.
• D) it is achieving economic but not technical efficiency.
• E) defense goods are preferred to consumer goods.

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Definitions:

Short Run

A term used in economics to describe a period during which at least one input, such as plant size, is fixed and cannot be changed by the firm.

Long Run

A period in which all factors of production and costs can be varied, and all market adjustments have been made.

Per Capita GDP Growth

The rate of growth of the Gross Domestic Product (GDP) per person in a specific area, commonly used to indicate economic health and living standards.

Labor Productivity Growth

An increase in the amount of goods and services produced per hour worked by employees, which is a key determinant of economic growth and competitiveness.