Given Below Is the Production Possibilities Schedule for a Small

Given below is the production possibilities schedule for a small island nation in South Pacific that produces capital and consumer goods. Table 2.2
Refer to Table 2.2.Identify the correct statement.

A) The best the economy can do is to produce 10 units of capital goods and 4 units of consumer goods.
B) If the economy produces 10 units of capital goods, it has sufficient resources to produce 4 units of consumer goods.
C) If the economy produces 10 units of capital goods and no units of consumer goods, there is unemployment.
D) If the economy produces 4 units of capital goods, it can manage to produce only 3 units of consumer goods.
E) In order to produce the 10th unit of capital goods, 4 units of consumer goods must be forgone.

Correct Answer:

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