Factors of Production/Production Possibility Curves

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

• They are being inefficient

• It is not impossible with the given resources

• They are still efficient, just at another point

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

The diagram shows two production possibility curves for an economy.

What could have caused the change in the economy’s production possibility curve from XX

to YY?

• a decrease in the price level

• a large number of industrial disputes

• a major earthquake

• an increase in unemployment

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 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 7 to 9 trucks is

• Scarcity
• 2 boats
• 2 trucks
• 3 boats

Economic growth affects the PPC by...

• shifting inward

• shifting outward

• causing no change at all

• turning it into a straight line

Suppose that a new machine that speeds up automotive production is introduced into the auto industry. This would cause the PPC to

• shift outward

• shift inward

• do nothing

• not enough information is provided

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

Changes in technology do not usually affect production

• True
• False