Interpreting PPC Graphs

Xam's Production Possibilities

Which of the following statements about the change shown in this PPC are true?

• Xam now has more resources or technology to produce more fruit smoothies, but not fast cars

• Xam has fewer resources or technology to produce fruit smoothies and fast cars

• Xam now has more resources or technology available that can produce either fast cars or fruit smoothies

• Xam's resources or technology have not changed

• Xam now has more resources or technology available to produce more fast cars, but not fruit smoothies

Which of the following best explains why this PPC is bowed outward from the origin?

• The resources used to produce scooters and ice cream are equally suited to producing scooters and ice cream.

• The production of scooters and ice cream is inefficient.

• The resources used to produce scooters and ice cream are not interchangeable.

• The opportunity cost of increasing production of scooters or ice cream is constant at any level of production.

• Production of scooters and ice cream is efficient.

What does the shape of this PPC indicate about how opportunity cost changes as more of one good is produced?

• constant opportunity cost

• zero opportunity cost

• increasing opportunity cost

• the PPC does not provide information about opportunity costs

• decreasing opportunity cost

Which of the following would NOT be part of the opportunity costs of going to college?

• the money spent on tuition

• interest payments on student loans

• money spent on textbooks

• foregone wages given up to attend college

• money spent on clothes

Alex's Production Possibilities

Based on Alex's PPC, which of the following statements best describes what we can say about how he should split his time?

• He should produce the combination at point E because he splits his time between the two activities.

• He should produce the combination at point C because it represents the most laundry folded and meals cooked.

• We cannot tell how he should split his time.

• He should produce at point A because food is a need but laundry is not.

• He should produce at point B because he has time left over to do other chores.

Which of the following represents a movement from inefficiency to efficiency in this PPC?

• From S to V

• From S to U

• From T to S

• From V to T

• From S to R

Which of the following is true based on the PPC shown here?

• Kitt's opportunity cost of writing another article in terms of designing a new logo decreases as more articles are written.

• Kitt's opportunity cost of designing a new logo in terms of writing another article increase as more logos are designed.

• The opportunity cost of writing an article or designing a logo remains constant as the production of the other good increases.

• Kitt's opportunity cost of designing a new logo in terms of writing another article decreases as more logos are designed.

• Kitt's opportunity cost of writing another article in terms of designing a new logo increases as more articles are written.

Which of the following statements best describes opportunity costs?

• The value of things given up when a decision is made.

• The monetary cost of any economic transaction.

• The price to a consumer of a good or service.

• The cost a buyer sees for something they want.

• The trade-offs faced when choosing how to use a scarce resource.

Given the PPC shown here, which of the following represents a movement from efficiency to inefficiency?

• From G to J

• From H to F

• From G to H

• From G to F

• From G to I

What statement explains why the PPC for ice cream and frozen yogurt is a straight line instead of a curve?

• The shape of the PPC signifies that the resources needed to produce the two goods are interchangeable.

• The shape of the PPC signifies that the resources needed to produce the two goods are very different.

• The shape of the PPC signifies increasing opportunity cost.

• The shape of the PPC signifies an inefficient use of resources.

• The shape of the PPC signifies efficient use of resources.