Production Possibility Curve

Which of the following statement is true?

• Human wants are infinite

• Resources are limited

• Scarcity problem gives birth to choice.

• All of these

Economics is primarily concerned with:

• Controlling unemployment and inflation.

• Allocating scarce resources for unlimited wants.

• Determining the level of government expenditure.

• Studying how new wants and economic resources can be produced.

Opportunity Cost is _________________________

• Direct Cost

• Total Cost

• Accounting Cost

• Cost of foregone opportunity

Mention the name of the curve which shows economic problem:

• Production Curve

• Production Possibility Curve

• Demand Curve

• Indifference Curve

Slope of production possibility curve is ______________

• A straight line

• Convex to the point of origin

• Concave to the point of origin

• None of these

A concave PPC indicates______________________.

• decreasing opportunity cost

• increasing opportunity cost

• constant opportunity cost

• law of diminishing returns

If an economy can produce various combinations of food and shelter along a production possibilities curve (PPC), then if we increase the production of housing along the PPC, which of the following is correct?

• We also increase the production of food.

• We must decrease the production of food.

• We cannot change the production of food

• None of these

A country’s infrastructure was damaged by a natural disaster.

Before the disaster, the country was producing at point Y on the production possibility curve (PPC).

Which point represents the country’s production immediately after the disaster?

• B

• C

• A

• D

The diagrams shows initial production possibility curve of PPC1

What may cause the movement of the production possibility curve from PPC1 to PPC2?

• A better educated workforce

• A decrease in the availability of raw materials

• Increased wages

• Lower productivity

Which of the following points is not attainable under the current situation?

• C

• B

• D

• E