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Unformatted text preview: b) The shape of the production possibilities frontier shifts outward. 1.8) a) Point E is unattainable because it is outside the production possibilities frontier. b) Points B, C & D are efficient because this is where maximum output is produced with available resources. c) Point A is inefficient because production is not using all available resources. d) Point B, because it is where the most resources are used to produce capital goods. 2.5) a) Neither country has a comparative advantage producing oil because their opportunity costs of producing oil are equal. b) These countries cannot gain from trade because neither has a comparative advantage producing either good....
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