If Both the Demand for and the Supply of Computers

question 19

Multiple Choice

If both the demand for and the supply of computers are increasing, which of the following statements is true?

• A) The consumer should buy a computer now since the price will be higher in the future.
• B) The consumer should wait and buy a computer later since the price will be lower in the future.
• C) The price of a computer will be the same in the future as it is now.
• D) It is impossible to know, given only this information, whether the prices of computers will go up or down in the future.

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Definitions:

Production Possibilities Curve

A graphical representation showing the maximum quantity of two goods or services that can be produced within a given time period and with available resources.

Efficiently

The ability to achieve a desired result or produce a desired output with the least amount of waste, effort, or inefficiency.

Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, assuming all resources are fully and efficiently utilized.