The fgure shows the PPF for a country that produces computers and computer facto

Question

The fgure shows the PPF for a country that produces computers and computer factorles. Which of the Computer factoriee (oumber per year) 15 12 ollowing would most likely shit the PPF from pPfo in one year to PPF, in the next? O A Nothing because the PPF does not shift O B. Decrease production of both computers and computer factories by moving into the interior of the O C. Decrease the production of computers from 11 million (at point B) to 9 milion (at point C) and build O D. Increase consumption of both computers and computer factories PPF 9 new computer factories O E. Increase the production of computers from 9 milion (at point C) to 11 milion (at pont 8) Computers (milliont per year

Explanation / Answer

1, The correct answer should be E.

2. At $12, the firm produces 1000 toys per week. The firm earns a loss $5500 in the short run.In the long run firms will leave the market till the losses are eliminated.

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