Production Possibility Curves Quiz

What does a point inside the production possibility curve represent?

• Efficient use of resources

• Attainable but inefficient use of resources

• Unattainable level of production

• The economy is at full employment

What does a point on the production possibility curve represent?

• Inefficient use of resources

• Unattainable level of production with current resources

• Efficient use of resources

• The economy is in a recession

What does a movement from one point to another on the production possibility curve illustrate?

• A decrease in the economy's resource base

• A trade-off between two goods

• An increase in the economy's level of technology

• A movement towards inefficiency

What does a point outside the production possibility curve indicate?

• The economy is using its resources efficiently

• The production level is attainable with current technology and resources

• The production level is unattainable with current technology and resources

• There is no opportunity cost in production

Which of the following best describes the concept of trade-offs in production?

• The process of increasing production of all goods without any sacrifices

• The reduction of production in one good to increase production of another

• The increase in production due to technological advancements

• The allocation of resources to produce a single good

What is the condition where we try to satisfy unlimited desires with limited resources?

(a)  

Which is the best example of why a popstar might choose not to attend college?

• They wouldn't have anything to do

• The opportunity cost of reduced fame and money is too high

• They aren't smart enough to get in

• College is too expensive for them

This weekend, you have the choice of going to see Beyonce in concert or studying for your economics class, and you choose to go see Beyonce. What is the opportunity cost of your decision?

• Studying for your economics class

• Having to pay for a Beyonce ticket

• Hanging out with your best friends

• Cooking dinner

What is the next best alternative that you give up when you make a decision?

(a)  

What level of production is represented by point F (purple) on the graph?

• Attainable and inefficient

• Attainable and efficient

• Unattainable

• There is no point F