Scarcity and PPF

Which of the following is the best definition of the production possibilities frontier?

• a graph showing how much of 2 goods a country or persona can produce

• unlimited needs and wants with only limited resources to meet them

• 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

• unlimited needs and wants with only limited resources to meet them

• the opportunity one has to give up in order to gain something else

• land, labor, capital, entrepreneurs

If a point lies beneath or inside someone's production possibilities frontier

• They are being over efficient

• They are being inefficient

• They are producing an impossible combination of goods

• None of the above

What is the fundamental problem of every society?

• the production of only two goods

• scarcity

• economic interdependence

• trade and exchange

We consider Land, Labor, Capital, and Entrepreneurship to be

• a choice we make between alternatives

• categories of human needs or wants

• goods produced on our production possibilities graph

• our productive resources

Using resources in such a way as to produce the most goods for the lowest cost is called

• efficiency

• inefficiency

• scarcity

• economic growth

An efficient economy is one that

• has very few people who do not work for a living.
• is experiencing underutilization.
• uses its resources to make the most goods and services.
• Has production inside the boundaries of it’s production possibilities frontier.

On a production possibilities frontier, how would we find a point of efficiency?

• Any point on the horizontal axis

• A point that is beneath or inside the production possibilities frontier.

• A point that is outside or beyond the production possibilities frontier.

• Any point on the production possibilities frontier.

The problem of scarcity exists because

• resources are limited and wants are limited.

• resources are unlimited and wants are limited.

• resources are limited and wants are unlimited.

• resources are unlimited and wants are unlimited.

Which of the best definition of opportunity cost?

• the direct cost of a good in money terms

• the value of the alternative given up

• a choice whereby something is gained and some other thing is given up

• unlimited human wants with limited resources to meet them