Question

Figure 2-6 Graph B Graph A Graph C Coupes Coupes Coupes SUVs SUVs SUVs 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. Suppose GM chooses to produce both a coupe version and an SUV version of this hybrid-engine vehicle for its Cadillac brand. Figure 2-6 shows changes to its production possibilities frontier in response to new developments and different strategic production decisions.

Answer 1

In response to new developments and different strategic production decisions ,production possibilities frontier shifts outward. It is mentioned that in response to changing consumer demands, Cadillac cuts back on the production of SUVs and increases its production of coupes. This strategy is best represented by movement from H to J in Graph B. Hence, option(D) is correct.