Production Possibilities curve

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.

• True
• False

The table shows the production possibilities for a country. Based on the table, which of the following production combinations is a possibility?

• 28 pizzas and 5 pairs of shoes

• 3 pairs of shoes and 23 pizzas

• 2 pairs of shoes and 20 pizzas

• 4 pairs of shoes and 15 pizzas

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

What is opportunity cost?

• 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

The opportunity cost of increasing production from 7 to 9 trucks is

• Scarcity
• 2 boats
• 2 trucks
• 3 boats

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

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

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

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

• Shift outward
• Shift inward
• Do nothing
• Not enough information is provided

Define Economic growth...

• When plants and animals get bigger

• When all resources are being used

• An increase in the amount of goods and services produced

• Giving something up to gain something else