Production Possibilities Curve

What does the production possibilities curve illustrate?

• The law of demand

• The concept of scarcity

• The concept of elasticity

• The law of supply

What does a point inside the production possibilities curve indicate?

• Unattainable combination

• Economic growth

• Underutilization of resources

• Efficiency

What does a bowed out production possibilities curve indicate?

• No opportunity cost

• Constant opportunity cost

• Increasing opportunity cost

• Decreasing opportunity cost

What does a straight line production possibilities curve indicate?

• Constant opportunity cost

• Increasing opportunity cost

• Decreasing opportunity cost

• No opportunity cost

What does a point outside the production possibilities curve indicate?

• Underutilization of resources

• Efficiency

• Economic growth

• Unattainable combination

What causes the production possibilities curve to shift?

• No change in resources

• Decrease in resources

• Increase in resources

• Decrease in technology

What does a combination on the production possibilities curve indicate?

• Economic growth

• Underutilization of resources

• Full employment

• Unemployment

What is the memory device for understanding the production possibilities curve?

• The hat

• The glove

• The double pencil

• The shoe

What is the concept used to calculate the specific number of squares given up when producing a certain number of triangles?

• Opportunity cost

• Trade-offs

• Efficiency

• Scarcity

What does a graph with a bowed out production possibilities curve indicate about opportunity cost?

• Constant opportunity cost

• Increasing opportunity cost

• Decreasing opportunity cost

• No opportunity cost