Use this link to access approaite figure: http://www.youtube.com/watch?v=inBYySU

Question

Use this link to access approaite figure: http://www.youtube.com/watch?v=inBYySUQJ1k

This a multiple choice question, pick one answer (A-E)

Please explain why you pick an answer

10. Consider the economy described by the production possibilities curves in the figure above. Which of the following statements is true?
A) The economy produced more goods in 1990 than in 1980.
B) If the economy produces only goods, it is capable of producing more goods in 1990 than in 1980.
C) The economy produced more services in 1990 than in 1980.
D) The economy is capable of producing more services in 1990 than in 1980.
E) The economy is probably worse off in 1990 than it was in 1980.

Explanation / Answer

D The answer is the same as other question you posted. The maximum services producable increased while goods stayed stagnant, implying that the economy's capability to produce services increased from 1980 to 1990.

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