1.4 Production possiblity curve diagram

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 

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

If a point lies on the curve this means the company/country/individual is being efficient. If a point lies inside the curve, what does that tell?

• They are being over efficient

• There is an idle, or unproductive, or use of resources

• It is not impossible with the given resources

• They are still efficient, just at another point

What does point B represent?

• Production at greater than the country's minimum potential

• Production is less than the country's minimum potential

• Production is greater than the country's maximum potential

• Production at the country's maximum potential

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

What is the production possibilities curve?

• a graph that shows how efficient an economy can produce a combination of 2 goods
• a graph that shows how much money something is
• a graph that shows the opportunity a country has to give up in order to lose something else
• a visual representation of how land, labor, capital, entrepreneurs are distributed

The opportunity cost of increasing production from 4 to 7 boats is

• 1 boat
• 2 boats
• 2 trucks
• 3 trucks

The production possibilities curve is an illustration of what?

• Opportunity costs and trade-offs
• Only opportunity costs
• Only trade-offs
• none of the above

If a point lies on the curve this means the company is being efficient. If a point lies inside the curve, this tells the company what?

• They are being over efficient
• They are not efficient
• It is impossible
• None of the above