Production Possibilities Curve Quiz

What does the production possibilities curve (PPC) illustrate?

• The price of goods in an economy

• The demand for goods in an economy

• The quantity of goods an economy can consume

• All combinations of two goods an economy can produce with fixed resources

What does a point on the production possibilities curve (PPC) represent?

• Productive efficiency

• Inefficient use of resources

• Unattainable production levels

• Recession in the economy

What causes the production possibilities curve (PPC) to shift outward?

• No change in the quantity or quality of resources

• Increases in the quantity or quality of resources

• Decreases in the quantity of resources

• Decreases in the quantity or quality of resources

How are opportunity costs calculated from a production possibilities curve (PPC)?

• By analyzing the demand and supply curves

• By looking at the shape of the curve

• By calculating the average total cost curve (ATC)

• By checking the axes and doing the math

What is the difference between a concave PPC and a linear PPC?

• Concave PPC has increasing opportunity costs, while linear PPC has constant opportunity costs

• Concave PPC has constant opportunity costs, while linear PPC has increasing opportunity costs

• Concave PPC has outward shifts, while linear PPC has inward shifts

• Concave PPC represents inefficient use of resources, while linear PPC represents productive efficiency

What is the maximum level of production possible for an economy represented by on the production possibilities curve (PPC)?

• All points outside the curve

• All points on the curve

• All points at the origin

• All points inside the curve

What does an inward shift of the production possibilities curve (PPC) indicate?

• Decrease in the quantity or quality of resources

• Increase in the quantity or quality of resources

• Efficient use of resources

• No change in the quantity or quality of resources

What does a point of production inside the production possibilities curve (PPC) indicate?

• Recession in the economy

• Inefficient use of resources

• Productive efficiency

• Unattainable production levels

What is the opportunity cost of increasing the production of one good on the production possibilities curve (PPC)?

• The decrease in the quantity of the other good

• The average total cost of the other good

• The marginal cost of the other good

• The increase in the quantity of the other good

What causes a shift in the production possibilities curve (PPC) for one good without impacting the other good?

• Increase in the quantity or quality of resources

• Decrease in the quantity or quality of resources

• No change in the quantity or quality of resources

• Changes in the price of the goods