Use the following to answer question 5: Figure: Bicycles and Radishes II Bicycle

Question

Use the following to answer question 5: Figure: Bicycles and Radishes II Bicycles (per period) Tons of radishes (per period) 5. (Figure: Bicycles and Radishes II) Examine the figure Bicycles and Radishes II. The country depicted in this figure is operating at point M. It could achieve production at point I only if it: A) devoted more resources to radish production. B) devoted more resources to bicycle production. C) increased the quantities of capital, natural resources, or labor available or improved its technology. D) used its resources more efficiently

Explanation / Answer

The nation is already using its available resources efficiently and that is why it is operating at the PPF and not inside it. It can either increase its resources of capital or labor or it can upgrade its technology to increase production potential. Hence option C is correct

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