ECON Chapter 2 Quiz

Production Possibilities Frontiers can shift outward but not inward

• True
• False

The law of increasing opportunity cost results from the varying ability of resources to adapt to the production of different goods and it helps to explain why production possibilities curves are typically bowed outward

• True
• False

With respect to a PPF for goods X and Y, productive efficiency implies that in order to produce more of good X there will be a reduction in production of good Y

• True
• False

In a situation where two goods can be produced by two different people, it is possible for one person to have a comparative advantage in the production of both goods and the other person to have the comparative advantage in the production of neither good

• True
• False

A decrease in the quantity of resources available causes a movement from one point on a given PPF to another point along the same PPF

• True
• False

The law of increasing opportunity costs helps to explain why PPF's are typically bowed-outward

• True
• False

A production possibilities frontier separates an attainable region from an unattainable region

• True
• False

When an economy is not using all of its resources, it is producing at a point below its production possibilities frontier

• True
• False

When opportunity costs are constant, the PPF will be a straight line

• True
• False

Economic growth is illustrated by a shift inward (toward the origin) of the PPF

• True
• False