Production Possibilities Curve Quiz Review

Which of the following best illustrates the use of physical capital goods?

• using workers to load a freight car

• using wind to generate electricity

• using marginal utility to measure productivity

• using a tractor to plow a field

Which of the following is an example of an entrepreneur?

• baseball player

• military personnel 

• fireman

• small business owner

In economic terms, what does opportunity cost refer to?

• growth

• the value of the next best alternative

• the benefit of expanding production

• efficiency

When an economy is operating at the production possibility curve/frontier…

• all workers are used

• all factories and equipment are at full production

• all natural resources are utilized

• all of the answers

Which of the following scenarios would result in underutilization in an economy?

• invention of a new “gasless” tractor that runs on water

• labor union strikes shuts down microchip plant for over a year

• the government spends twice as much money increasing the military

• new low cost sources of oil are found

Which of the following scenarios would cause growth (PPC shifts to right) in an economy?

• labor union strike shuts down microchip plants for three months

• a severe drought lingers on in the Midwest

• discovery of a low-cost means of generating and storing solar energy

• the government decides to spend less money

Economy A produces only skateboards and bicycles. What would be the opportunity cost of producing more skateboards?

• More skateboards

• More bicycles

• Less skateboards

• Less bicycles