Central problem of economics

Those who are poor are more likely to face scarcity than the rich.

• True

• False

The opportunity cost of producing a good is the scarce resources used up in the process.

• True

• False

Even if a resource has only one use (i.e. produce Good A), there will be opportunity cost incurred when the resource is used to produce Good A.

• True

• False

The position of a PPC, with reference to the origin, is dependent on its level of resources and technology.

• True

• False

Which of the following can lead to the PPC shifting outwards i.e. increase in productive capacity.

• Improvement in technology

• Increase quantity of FOP

• Increase quality of FOP

A country’s PPC will be downward sloping as long as its resources are scarce and have alternative uses.

• True

• False

The PPC diagram by itself can be used to illustrate productive efficiency but not allocative efficiency.

• True

• False