Econ Chapter 1.3 Quiz

A production possibilities curve illustrates all the

• technological changes that help to increase production.
• choices a person can make between items.
• economic choices a society can make.
• combinations of two goods or services that can be produced.

Scarcity requires

• production possibilities.
• efficiency.
• choices.
• abundant resources.

A production possibilities curve is a

• completely accurate representation of reality.
• useful when making trade-off choices.
• model of reality based on specific assumptions.
• cause of scarcity in an economy.

An assumption in making a product possibilities curve is that

• technology will not change during the period being studied.
• technology will change during the period being studied.
• available resources will change during the period being studied.
• factors of production do not remain constant.

An increase in available resources will have which of the following effects on the production possibilities curve?

• The curve will shift upward.
• The curve will shift downward.
• The curve will shift to the left.
• The curve will shift to the right.

Opportunity Cost

• The sacrifice of one choice for another
• The value of the next best alternative given up to obtain an item

Trade-off

• The sacrifice of one choice for another
• The value of the next best alternative given up to obtain an item