1.1 Economic methodology and the economic problem

An economy is currently producing a combination of consumer and capital goods shown at point $U\,$ in the diagram below.

Production Possibility Frontier Diagram

Which of the following statements is correct?

A movement from $U$ to $V$ achieves productive efficiency but incurs an opportunity cost equal to the foregone Capital Goods.

A movement from $V$ to $W$ maintains productive efficiency but incurs an opportunity cost of Capital Goods.

A movement from $U$ to $W$ achieves productive efficiency with zero opportunity cost.

A movement from $V$ to $X$ is possible in the short run if the economy employs its existing unemployed resources more effectively.

1.1 Economic methodology and the economic problem Questions

An economy is currently producing a combination of consumer and capital goods shown at point $U\,$ in the diagram below.

Production Possibility Frontier Diagram

Which of the following statements is correct?

A movement from $U$ to $V$ achieves productive efficiency but incurs an opportunity cost equal to the foregone Capital Goods.

A movement from $V$ to $W$ maintains productive efficiency but incurs an opportunity cost of Capital Goods.

A movement from $U$ to $W$ achieves productive efficiency with zero opportunity cost.

A movement from $V$ to $X$ is possible in the short run if the economy employs its existing unemployed resources more effectively.