Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:
a. economy A will operate inefficiently.
b. economy B will operate inefficiently.
c. economy A and economy B will grow equally fast.
d. economy A will grow faster than economy B.
e. economy B will grow faster than economy A.
Question 2
If an economy keeps increasing its capital stock, then over time its production possibilities curve will:
a. not move.
b. shift to the left.
c. shift to the right.
d. disappear because scarcity ceases to exist.
e. demonstrate massive job loss for workers.
Major trunk lines carrying long-distance traffic crisscrossed the area east of the Mississippi. The
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