Production Possibility Curve Quiz

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

What is the definition of the economic term Opportunity Cost?

• the value of the next best alternative that is given up due to the choice you made 
• The price you pay to purchase something 
• The benefit you gain by making a decision 
• The amount of debt you take on by making a decision 

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

Efficiency is producing the maximum possible output from available resources

• True
• False

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

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

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

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

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently
• The opportunity cost of producing more machines is constant
• Country Y cannot produce at point E
• The most efficient point of production is point D

Production possibility curve is a set of

• Many goods

• One good

• Two goods

• Three goods