-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.

Question

-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.

Quizplus · Accepted Answer

The PPF (Production Possibility Frontier) expansion depends on the allocation of resources towards the production of goods (cell phones) and capital goods (new cell-phone factories). Producing 4 million cell phones efficiently means resources are being used effectively, but for the PPF to expand significantly, some resources must be allocated to building more factories (capital goods), which increases future production capabilities. Thus, focusing solely on producing cell phones would expand the PPF, but not as much as if resources were also directed towards building more factories.

-The Figure Above Shows How the PPF for Cell Phones