Final Revision

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

The production possibilities curve is an illustration of what?

• Opportunity costs and trade-offs
• Only opportunity costs
• Only trade-offs
• none of the above

The opportunity cost of increasing production from 7 to 9 trucks is

• Scarcity
• 2 boats
• 2 trucks
• 3 boats

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently
• The opportunity cost of producing more machines is constant
• Country Y cannot produce at point E
• The most efficient point of production is point D

If a natural disaster strikes, the production possibilities curve can shift

• No shift
• To the left
• To the right
• Outward on one axis only

Improvements in technology for producing all goods must result in:

• An inward shift in the production possibilities curve 
• A flatter production possibilities curve 
• An outward shift in the production possibilities curve 
• A steeper production possibilities curve 

What can cause a production possibilities curve to move to the right?

• thousands of people move out of the country
• an epidemic kills thousands of young men and women
• a new invention lowers the cost of production
• the population is growing increasingly old

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

SSEF1(d) The opportunity cost of shifting production from "Point E" to "Point C" would be:

• 30 cans of cola
• 30 chocolate bars
• 70 cans of soda
• 20 chocolate bars