Between 2000 and 2010,the Price of a PC Fell and the Quantity

question 5

Multiple Choice

Between 2000 and 2010,the price of a PC fell and the quantity of PCs sold increased.Which of the explanations below is consistent with these facts?

• A) The demand for PCs increased by more then the supply of PCs increased.
• B) The supply of PCs increased by more than the demand for PCs increased.
• C) The demand for PCs decreased by more than the supply of PCs increased.
• D) Both the supply of PCs and the demand for PCs decreased.

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Definitions:

Resource Allocation

The process of distributing available resources among various competing needs or uses in an effort to achieve maximum efficiency or to accomplish specific objectives.

Excise Tax

An indirect tax charged on the sale of a particular good or service, often included in the price of products like gasoline, alcohol, and tobacco.

Marginal Cost (MC) Curves

Graphs showing the cost of producing one additional unit of a good, illustrating how the cost varies with the level of output.