The Following Graph Shows the Production Possibilities Curve for the Economy

question 160

Multiple Choice

The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year. If both Art and Silvia worked full-time producing beef, how many pounds of beef can they produce per year?

• A)2,000 pounds
• B)4,000 pounds
• C)6,000 pounds
• D)8,000 pounds

---

Definitions:

Decreasing-Cost Industry

An industry where production costs decrease as the industry grows, often due to economies of scale.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments such that supply equals demand, and no economic profits are earned.

Increased Demand

A situation where the desire or need for a product or service grows, often leading to higher sales or consumption.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, and easy entry and exit from the market.