The Global Economy Unit Test

Question

2 of 182 of 18 Items

Question
If a country directs all of its resources into producing one item, it can produce a maximum of either 2,000 computers or 10,000 books. The country can also produce a combination of these two goods, but the opportunity cost of producing either item will remain the same. They also have several beneficial trade partners. The residents of the country want to consume a combination of 1,500 computers and 8,000 books, assuming that no economic growth will occur in the near future. Which of the following is a viable option to achieve the resident's desired consumption?(1 point)
Responses

The country could not achieve this by any means.
The country could not achieve this by any means.

The country could only achieve this through domestic production.
The country could only achieve this through domestic production.

The country could only achieve this through trade.
The country could only achieve this through trade.

The country could achieve this through either domestic production or trade.
The country could achieve this through either domestic production or trade.
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Answer 1

To determine if the country can achieve the desired consumption of 1,500 computers and 8,000 books, we need to analyze its production capability and potential means of trade.

1. Production Possibilities: The country can either produce:
   • 2,000 computers (and no books), or
   • 10,000 books (and no computers).

The opportunity cost of producing books vs. computers implies that if the country decides to produce a combination of both goods, it must adhere to the trade-off represented by the production possibility frontier (PPF).

2. Desired Consumption: The residents want to consume:
   • 1,500 computers and 8,000 books.

To see if this is viable, we must note the following:

• Producing 1,500 computers would leave the country with resources capable of producing a combination of books as well.
• The opportunity cost outlined also indicates that they must give up some number of books to produce the computers.

3. Calculation:
   • If the country dedicates resources to produce 1,500 computers, it can use the remaining resources to produce books.
   • To achieve 1,500 computers, the country must allocate some resources to books as well.

However, to figure out if they can produce exactly 8,000 books while also producing 1,500 computers, we note:

• If they try to produce 1,500 computers (out of a max of 2,000), they should still have enough resources to produce books.
• Given that maximum production is capped, and the desired amount exceeds the number of books they can produce if focused solely on producing 1,500 computers, they cannot simultaneously produce both at the desired consumption levels without external trade.

Conclusion:

Given this analysis, the most accurate response would be:

The country could only achieve this through trade.

This is because it cannot solely achieve both desired goods numbers (1,500 computers and 8,000 books) through its own domestic production without exceeding its production capabilities.