-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:

Price Elasticity

An index showing the degree to which demand for an item adjusts in response to its price changes.

Midpoint Method

A technique used in economics to measure the elasticity of a variable by averaging the starting and ending points.

Price Elasticity

A measure indicating how much the quantity demanded of a good or service changes in response to a change in its price.

Midpoint Method

A technique used in economics to calculate the elasticity of a variable, using the average of initial and final values as reference points.