Production Possibility Curve/Frontier

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

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 

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 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

Which coordinate is impossible to be produced?

• F

• G

• E

• A

Which coordinates are inefficient to produce both products? Multiple answer

• B

• F

• G

• E

What is the opportunity cost if you go from choice A to choice D.

• Get an additional 90 tons of steel

• Let go of 90 tons of wheat

• Get an additional 70 tons of steel

• Let go of 65 tons of wheat

Calculate the opportunity cost of choice B to A

• Let go 55 tons of steel

• Let go 15 tons of wheat

• Additional 20 tons of wheat

• Additional 55 tons of steel

Which of the following does NOT illustrate opportunity cost?

• I should buy a book rather than a food

• If I buy a computer, I must do without a 35” television

• If I spend a lot now means I will spend more in the future

• If I study today, I must give up going to the football game