Given Below Is the Production Possibilities Schedule for a Small

question 10

Multiple Choice

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods. Table 2.2
Refer to Table 2.2.Identify the correct statement.

• A)The best the economy can do is to produce 10 units of capital goods and 4 units of consumer goods.
• B)If the economy produces 10 units of capital goods, it has sufficient resources to produce 4 units of consumer goods.
• C)If the economy produces 10 units of capital goods and no units of consumer goods, there is unemployment.
• D)If the economy produces 4 units of capital goods, it can manage to produce only 3 units of consumer goods.
• E)In order to produce the 10th unit of capital goods, 4 units of consumer goods must be forgone.