Economics 9708 · AS & A Level · Production possibility curves

Production possibility curves — practice question

The diagram illustrates an economy’s production possibility curve. It has been using its resources in a mix of 80% consumer goods production and 20% capital goods production. What will happen if it chooses to double its capital goods output?

  • Aa gain of 20 capital goods
  • Ba gain of 40 capital goods
  • Ca loss of 200 consumer goods
  • Da loss of 600 consumer goods

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