Exhibit 2-12 Production possibilities curve
In Exhibit 2-12, suppose an economy with the given production possibilities curve is currently located at point A in the figure. Which of the following statements is false?
A. This economy could produce more of both capital and consumption goods.
B. This economy is experiencing full employment.
C. This economy could produce more capital goods while holding fixed the number of consumption goods produced.
D. This economy could produce more consumption goods while holding fixed the number of capital goods produced.
Answer: B
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