Econ- 2.2 Part 1 Formative Assessment- Option 2

The Production Possibilities Curve (PPC) model shows:

• • Infinite production possibilities

• • Alternative ways to use factors of production

• • Only one way to use factors of production

• • The consumption preferences of individuals

The PPC model shows the maximum amount of ___ goods or services an economy can produce.

Using the PPC Model and Table given, which of the following is a production point that shows EFFICIENT production of Power Drills and Skis.

• Point F

• Point G

• Point E

• Point Z

Using the PPC Model and Table given, which of the following is a production point that shows INEFFICIENT production of Power Drills and Skis.

• Point F

• Point G

• Point E

• Point Z

Using the PPC Model and Table given, which of the following is a production point that shows IMPOSSIBLE production of Power Drills and Skis.

• Point F

• Point G

• Point E

• Point A

If an economy uses its factors of production as efficiently as possible, it will produce at:

• Any point inside the PPC

• Any point outside the PPC

• Any point on the PPC

• Any point on the inefficiency line

Assume this society is currently at Production Point C, what would be the opportunity cost to this society of producing the 3nd pair of Skis (moving to Point D)? ​ (a)  

• 3 Power Drills
• 1 Pair of Skis
• 2 Pairs of Skis
• 2 Power Drills

 What is the opportunity cost of moving from Production Point D to Production Point A?

• 2 Skis

• 3 Power Drills

• 2 Power Drills

• 3 Skis