Opportunity Costs and Production Possibilities Frontier

True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.

• True
• False

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

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

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

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production 

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

Movement down the PPF curve indicates that the opportunity cost of more capital goods is producing more consumer goods

• True
• False

Efficiency is producing the maximum possible output from available resources

• True
• False