1.5 Production Possibilities Curve (PPC)

Multiple Choice

Which of the following concepts are demonstrated by the Production Possibilities Curve (PPC)?

• Scarcity, trade-offs, opportunity costs, and efficiency

• Supply and demand only

• Market equilibrium and price floors

• Inflation and unemployment

Multiple Choice

What are the key assumptions made when constructing a Production Possibilities Curve?

• Only two goods can be produced, all resources are being used efficiently, all resources are fixed

• Unlimited goods can be produced, resources are unlimited, resources are not used efficiently

• Only one good can be produced, resources are fixed, resources are not used efficiently

• Only two goods can be produced, resources are unlimited, resources are used inefficiently

Open Ended

Explain how the PPC demonstrates the concept of opportunity cost using the points on the curve.

Fill in the Blank

Any point outside the PPC is considered ___.

Multiple Choice

Which of the following best describes the shape of a Production Possibilities Curve (PPC) when there is increasing opportunity cost?

• Convex (bowed outward)

• Straight line

• Concave (bowed inward)

• Vertical line

Multiple Choice

What does a straight-line Production Possibilities Curve (PPC) indicate about opportunity cost?

• Constant opportunity cost

• Increasing opportunity cost

• Decreasing opportunity cost

• Zero opportunity cost

Multiple Select

Which of the following are shifters of the Production Possibilities Curve (PPC)?

• Change in resource quantity or quality

• Change in technology

• Change in trade

• Change in consumer preferences

Open Ended

After learning about the production possibilities curve, what questions do you still have or what would you like to know more about?

Open Ended

How would you explain the importance of the production possibilities curve (PPC) in understanding economic choices?