FIGURE 1- 5

Multiple Choice

FIGURE 1- 5
-Refer to Figure 1- 5.Suppose that the relevant production possibilities boundary is the one labelled B.This boundary implies that

A) consumer goods are preferred to capital goods.
B) the concept of opportunity cost is not at work in this economy.
C) capital goods are preferred to consumer goods.
D) the opportunity cost of producing either capital goods or consumer goods does not depend on how much of each good is produced.
E) in this society the resources are not efficiently employed.