Production Possibilities and Opportunity Cost

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

What are Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production 

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

If many workers decide to retire at an early age, the PPF would shift inward.

• 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

An increase in the labor force would cause the PPF to 

• Shift inward
• Shift outward
• Do nothing
• Turn into a straight line