Figure 2-6

General Motors recently approved for production the Cadillac Converj, an electric car based on its Chevy Volt. The Converj will feature a "Generation 1.5 Voltec" powertrain, with a hybrid engine that runs on a combination of electricity and gasoline. Assume GM chooses to produce both hybrid-engine vehicles and gasoline-engine vehicles for its Cadillac brand. Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions.
-Refer to Figure 2-6.Assume a technological advancement greatly reduces the cost to produce hybrid-engine vehicles.This is best represented by the
A) movement from E to F in Graph A.
B) movement from G to H in Graph B.
C) movement from K to L in Graph C.
D) movement from H to J in Graph B.

Question

Figure 2-6
  
General Motors recently approved for production the Cadillac Converj, an electric car based on its Chevy Volt. The Converj will feature a "Generation 1.5 Voltec" powertrain, with a hybrid engine that runs on a combination of electricity and gasoline. Assume GM chooses to produce both hybrid-engine vehicles and gasoline-engine vehicles for its Cadillac brand. Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions.
-Refer to Figure 2-6.Assume a technological advancement greatly reduces the cost to produce hybrid-engine vehicles.This is best represented by the
A) movement from E to F in Graph A. 
B) movement from G to H in Graph B. 
C) movement from K to L in Graph C. 
D) movement from H to J in Graph B.

Quizplus · Accepted Answer

The movement from E to F in Graph A represents a decrease in the cost of producing hybrid-engine vehicles, as the cost curve shifts downward.

Figure 2-6 General Motors Recently Approved for Production the Cadillac Converj, an Production