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AP® Macroeconomics

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Interpreting Production Levels

APMACR-GCYTGQ

Consider the information below then answer the question accordingly. The economy can produce the following goods at maximum production with full employment of resources.

A. 0 Guns - 10 Butter

B. 2 Guns - 8 Butter

C. 4 Guns - 6 Butter

D. 6 Guns - 4 Butter

E. 8 Guns - 2 Butter

F. 10 Guns - 0 Butter

If the country in question was producing at point C, but people actually wanted more guns and less butter, then

A

the economy is at allocative efficiency but not productive efficiency.

B

the economy is at productive efficiency but not allocative efficiency.

C

the economy is at productive and allocative efficiency.

D

the economy is at neither allocate nor productive efficiency.

E

The economy is at allocative efficiency and so it will never achieve productive efficiency evidenced by the ratios