Production Possibilities Frontier (PPF)

True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.

• True
• False

A country is responsible for producing guns for military defense and school lunches for students who can't afford it ("butter"). The opportunity cost of producing more guns is.. 

• decrease in the # of lunches divided by the increase in the # of guns
• increase in the # of guns divided by the decrease in the # of lunches
• decrease in the # of guns divided by the increase in the # of lunches
• increase in the # of lunches divided by the decrease in the # of guns

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

The table above 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

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

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

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

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money
• by making choices
• by stealing
• by setting a budget

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production