-The Figure Above Shows How the PPF for Cell Phones

question 142

Multiple Choice

-The figure above shows how the PPF for cell phones and new cell-phone factories can expand.In the figure,if the economy produced 4 million cell phones using the resources efficiently,the PPF would

• A) expand, but not as far as shown in the figure.
• B) not expand.
• C) expand farther than shown in the figure.
• D) expand along the vertical axis and not along the horizontal axis.
• E) expand evenly along both axes.

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Definitions:

Distorting Taxes

Taxes that alter the allocation of resources and change consumer or producer behavior, leading away from an efficient market outcome.

Excess Burdens

Refers to the additional costs or losses to society beyond the direct financial effects, caused by inefficiencies or distortions in market transactions.

Benefits-Received Principle

A theory of taxation wherein individuals pay taxes in proportion to the benefits they receive from government services.

Camping Fee

A charge for the privilege of accessing and using facilities or spaces designated for camping.