Suppose the economy is operating at point B. Achieving production at point F would require that the economy: O A. achieve full employment and an efficient allocation of resources. O B. improve its technology or increase its resources O C. reduce its production of submarines. O D. reduce its production of strawberries

1.4. Consider two economies, labelled A and B. In each one, let every two-period-lived person be endowed with 20 units of the consumption when young and nothing when old. In Economy A, each young person chooses to consume 10 units of the consump- tion good. In Economy B, each young person chooses to consume 8 units of the con- sumption good. In each economy, the young person's choice is the one that maximizes lifetime welfare. a. What, if anything, can you infer about the welfare level of the current and future generations from this information? Specifically, is one on an indifference curve representing greater welfare than the other? b. What, if anything can you infer about the welfare of the initial old from the descrip- tion given for Economies A and B?

"Because it is good for individual households to increase their saving in the short run, it is therefore good for a nation's economy in the short run if all households increase their saving." This statement is an example of: O a. the fallacy of composition. O b. the post hoc fallacy. O c. the ceteris paribus assumption. O d.marginal analysis.