Production Possibilities Frontier (PPF)

Which of the following best describes a point inside the Production Possibilities Frontier (PPF)?

• A point that represents the most efficient production levels

• A point that indicates underutilization of resources

• A point that is unattainable with current resources

• A point that shows the trade-off between the production of two goods

What does the PPF illustrate?

• The maximum number of goods that can be produced in a factory

• The boundary between combinations of goods that can and cannot be produced

• The total economic value of goods produced in Canada

• The technology available to produce goods and services

What does the model economy used to illustrate the PPF assume about the production of other goods and services when the quantities of two goods change?

• The quantities of other goods and services increase proportionally

• The quantities of other goods and services decrease proportionally

• The quantities of other goods and services remain the same

• The quantities of other goods and services are not considered

Which of the following best describes the area labeled "Unattainable" in the Production Possibilities Frontier graph?

• Combinations of goods that can be produced using available resources and technology

• Combinations of goods that cannot be produced due to limited resources

• Combinations of goods that represent inefficient use of resources

• Combinations of goods that are outside the economic model

What does the PPF illustrate when referring to points outside the frontier?

• Efficiency in production

• Scarcity because these points are unattainable

• The maximum production capacity

• The combination of goods that consumers prefer

When do we achieve production efficiency?

• When we produce goods and services at the highest possible cost.

• When we produce goods and services at the lowest possible cost.

• When we produce goods and services with the maximum resources available.

• When we produce goods and services inside the PPF.

What does it mean if production is inside the PPF?

• It means that production is at its most efficient state.

• It means that resources are being used to their full potential.

• It means that production is inefficient due to unused or misallocated resources.

• It means that production is exceeding the maximum capacity.

What is a tradeoff along the PPF?

• A situation where no choice has to be made between different production possibilities.

• A decision that involves no cost and maximizes production efficiency.

• A choice that involves a cost—known as an opportunity cost.

• A decision to produce only one type of good or service.

Which of the following is an example of a tradeoff?

• Choosing to produce more pizzas without affecting the production of cola.

• Spending more time studying for a higher grade without losing leisure or sleep time.

• Doctors wanting to spend more on cancer research without sacrificing other research areas.

• Parliament wanting more education funding without affecting national defence or border security.

Opportunity cost is described as a ratio. What does this ratio represent?

• The increase in the quantity produced of one good divided by the decrease in the quantity produced of another good

• The decrease in the quantity produced of one good divided by the increase in the quantity produced of another good

• The total quantity produced of one good divided by the total quantity produced of another good

• The total quantity produced of both goods combined