Production Possibility Curve

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 

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 Opportunity Cost of moving from C to A? (Think in the terms of what do we have to forgo in the process.)

What does PPC show? Select Multiple options.

• Describes the production of only two products in economy.

• It explains the production when there is full and efficient utilisation all resources in economy

• It explains the consumption pattern in economy

• It is the combination of all possible output points of two goods given that technology and resources are fixed.

Which of the following are the choices in case the technology is fixed and all resources are efficiently employed. Choose the correct option/s.

• G

• C

• A

• E

• B

Which coordinate(s) is/are inefficient to produce both products? Choose the correct option/s.

• B

• F

• G

• E

Which scenario contributes towards the shifting of the curve in the picture above?

• When a country is struck by a natural disaster, natural resources are either exhausted or reduced due to the incident.

• Huge reduction in Construction Expenses and equipment manufacturing

• Economic decline due to Covid 19

• None of the above

The following diagram shows the production possibility frontier for an economy that produces bread and honey.

If the economy is initially at point W, then the opportunity cost of moving to point X is

• 6 units of honey.

• 8 units of honey.

• 12 units of bread.

• 23 units of bread.

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

• 5 pairs of shoes and 28 pizzas

• 3 pairs of shoes and 23 pizzas

• 2 pairs of shoes and 20 pizzas

• 4 pairs of shoes and 15 pizzas