The figure above shows how the PPF for cell phones and new cell-phone factories can expand. In the figure, if the economy chose the point on this year's PPF that is above point K, the next year's PPF would
A) shift inward along the vertical axis.
B) shift inward along the horizontal axis.
C) shift outward along the horizontal axis farther than the new PPF shown in the figure.
D) shift outward along the vertical axis, not along the horizontal axis.
E) shift outward along the horizontal axis, but not as far as the new PPF shown in the figure.
C
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Answer the following statement(s) true (T) or false (F)
1. When a two-part tariff is perfectly implemented, the monopoly charges a price that is greater than its marginal cost. 2. For a given quantity, a monopoly's marginal revenue is always greater than the price associated with that quantity. 3. When regulating a natural monopoly one should set the regulatory price such that the monopoly will produce the efficient level of output. 4. Deadweight loss because of a monopoly can be attributed to the fact that monopolies produce at a quantity where the price of the good exceeds the marginal cost of producing the last unit. 5. When there are significant differences among customers, a monopolist will look for opportunities to price discriminate.
In any given market, prices are determined by
A) specialization of labor. B) transactions costs. C) supply and demand. D) comparative advantage.
If Abigail can produce 4 tablets or 3 cellphones in a day, while Jacob can produce 1 tablet or 2 cellphones, then it is correct to state that
A) Abigail has a comparative advantage in producing cellphones. B) Abigail has an absolute advantage in producing tablets but not cellphones. C) Jacob has a comparative advantage in cellphones. D) Jacob has an absolute advantage in cellphones.
The quantity equation states:
A. P × V = M × Y. B. M × Y = P × V C. M × P = Y × V. D. M × V = P × Y.