Production Possibilities Curve /Frontier

Production Possibilities Curve /Frontier

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Multiple Choice

Which point represents "resources are not being used efficiently, or resources are being wasted or idle"?

• Point A

• Point Y

• Point X

• All of the above

Multiple Choice

What does point B represent?

• Production at greater than the country's minimum potential

• Production is less than the country's minimum potential

• Productive inefficiency

• Productive efficiency

Multiple Choice

What does point Y represent on the PPC?

• Efficiency

• Unattainable / impossible

• Inefficency

• Nothing

Multiple Choice

An increase in the labor force would cause the PPF to 

• Shift inward
• Shift outward
• Do nothing
• Turn into a straight line

Multiple Choice

Which of the following might cause an inward shift of the PPF?

• A computer network shuts down due to a virus

• More people earn bachelor degrees

• A new maching that produces bread faster is invented

• OPEC announces a new source of oil

Multiple Choice

What do points inside the PPF indicate?

• The combination of goods that employ goods efficiently

• The combination of goods that employ resources fully

• The combination of goods that do not employ resources fully

Multiple Choice

Efficiency is producing the maximum possible output from available resources

• True
• False

Multiple Choice

Movement down the PPF curve indicates that the opportunity cost of more capital goods is producing more consumer goods

• True

• False

Multiple Choice

The opportunity cost of increasing production from 4 to 7 boats is

• 1 boat

• 2 boats

• 2 trucks

• 3 trucks

Multiple Choice

The opportunity cost of increasing production from 7 to 9 trucks is

• Scarcity

• 2 boats

• 2 trucks

• 3 boats

Multiple Choice

What is opportunity cost?

• a graph that shows how much an economy can produce between 2 goods

• how much money something is

• the opportunity one has to give up in order to gain something else

• land, labor, capital, entrepreneurs

Multiple Choice

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods

• how much money something is

• the opportunity one has to give up in order to gain something else

• land, labor, capital, entrepreneurs

Multiple Choice

Based on the table, if the country is currently producing at point B and decides to produce at point C, the opportunity cost for the additional pair of shoes is ____ pizzas.

• 26

• 23

• 3

• 2

Multiple Choice

The table shows the production possibilities for a country. Based on the table, which of the following production combinations is a possibility?

• 28 pizzas and 5 pairs of shoes

• 3 pairs of shoes and 23 pizzas

• 2 pairs of shoes and 20 pizzas

• 4 pairs of shoes and 15 pizzas

Multiple Choice

If the production of good X increases by 3 units and production of good Y decreases by one unit, then the opportunity cost of one unit of X is ____ unit(s) of Y.

• 3

• 1

• 1/3

• 4

Multiple Choice

What is Brazil's opportunity cost for producing sugar?

• 3 pounds of cotton

• 0.33 (1/3) pounds of cotton

• 3 pounds of sugar

• 0.33 (1/3) pounds of sugar

Multiple Choice

What is Brazil's opportunity cost for producing cotton?

• 3 pounds of cotton

• 0.33 (1/3) pounds of cotton

• 3 pounds of sugar

• 0.33 (1/3) pounds of sugar

Multiple Choice

What is America's opportunity cost for producing sugar?

• 2 pounds of sugar

• 0.5 (1/2) pounds of sugar

• 2 pounds of cotton

• 0.5 (1/2) pounds of cotton

Multiple Choice

What is America's opportunity cost for producing cotton?

• 2 pounds of sugar

• 0.5 (1/2) pound of sugar

• 2 pounds of cotton

• 0.5 (1/2) pounds of sugar

Multiple Choice

For Marie and Isabella to benefit the most, what should happen?

• Marie should make bracelets and Isabella should make earrings and they trade.

• Marie should make earrings and Isabella should make bracelets and they trade.

• They should both make their own bracelets and earrings and not trade.

Multiple Choice

Who has the COMPARATIVE advantage in making earrings?

• Marie

• Isabella

Multiple Choice

Who has the COMPARATIVE advantage in making bracelets?

• Marie

• Isabella

Multiple Choice

What is Isabella's opportunity cost of making bracelets?

• 1/2 (0.5) bracelets

• 2 bracelets

• 1/2 (0.5) earrings

• 2 earrings

Multiple Choice

What is Isabella's opportunity cost of making earrings?

• 1/2 (0.5) bracelets

• 2 bracelets

• 1/2 (0.5) earrings

• 2 earrings

Multiple Choice

What is Marie's opportunity cost of making bracelets?

• 3/2 (1.5) bracelets

• 2/3 (.67) bracelets

• 3/2 (1.5) earrings

• 2/3 (.67) earrings

Multiple Choice

What is Marie's opportunity cost of making earrings?

• 3/2 (1.5) bracelets

• 2/3 (.67) bracelets

• 3/2 (1.5) earrings

• 2/3 (.67) earrings

Multiple Choice

Identify the basis of trade of the following table:

• Malaysia has comparative advantage in Cloth

• Malaysia has absolute advantage in Cloth production

• Japan has comparative advantage in Car

• Japan has absolute advantage in Cloth

Multiple Choice

The basis of trade based from the lowest opportunity cost is considered as ____.

• Factor Endowment

• Adam Smith Theory

• Comparative Advantage

• Absolute Advantage

Multiple Choice

Suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. Which of the following is true?

• Sam has an absolute advantage in making blankets
• Sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets
• Sam has a comparative advantage in making blankets
• Sam has a comparative advantage in knitting sweaters

Multiple Choice

Based on the table provided, which one of the following statements is correct?

• Japan has the absolute advantage in producing cars
• Japan has the comparative advantage in producing cars
• The United States has the absolute advantage in producing both cars and computers
• The opportunity cost of producing a car in Japan is 1/2 a computer

Multiple Choice

Which of the following would be a fair term of trade?

• 1 game for 3 widgets

• 1 game for 2 widgets

• 1 game for.1 widget

• 1 game for 1/2 widget

Multiple Choice

If I am better at all types of production, I have the ______ in all forms of production.

• Comparative advantage
• Specialization
• Absolute advantage
• developed nation

Multiple Choice

When determining comparative advantage one must determine

• Opportunity cost

• Specialization

• Absolute Advantage

• Embargos

Multiple Choice

Kim and Leah work together on a sales team, and part of their job involves writing articles and filling out worksheets. Their manager doesn't care who does what as long as they are productive.

Using the same amount of time and resources, Kim can write either 10 articles or complete 5 worksheets and Leah can either write 3 articles or complete 9 worksheets.

If Kim and Leah specialize and trade, which of the following is a trading price they will agree to?

• 1 article trades for 2 worksheets

• 1 article trades for 5 worksheets

• 1 article trades for 1/4 worksheet

• 1 articles trades for 1/5 worksheet

• 1 article trades for 4 worksheets