Production Possibilities Frontier

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

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money
• by making choices
• by stealing
• by setting a budget

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

Efficiency is producing the maximum possible output from available resources

• True
• False

What do points inside the PPF indicate?

• The combination of goods that employ goods efficiently
• The combination of goods that employ resources fully
• The combination of goods that do not employ resources fully

Which of the following might cause an inward shift of the PPF?

• A computer network shuts down due to a virus
• More people earn bachelor degrees
• A new maching that produces bread faster is invented
• OPEC announces a new source of oil

What does point B represent?

• Production at greater than the country's minimum potential
• Production is less than the country's minimum potential
• Productive inefficiency
• Productive efficiency

Changes in technology do not usually affect production

• True
• False