Production Possibilities Curve

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

The table shows the production possibilities for a country. Based on the table, which of the following production combinations is a possibility?

• 28 pizzas and 5 pairs of shoes

• 3 pairs of shoes and 23 pizzas

• 2 pairs of shoes and 20 pizzas

• 4 pairs of shoes and 15 pizzas

What is opportunity cost?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production 

Movement down the PPF curve indicates that the opportunity cost of more capital goods is producing more consumer goods

• True
• False

Efficiency is producing the maximum possible output from available resources

• True
• False

What do points inside the PPF indicate?

• The combination of goods that employ goods efficiently
• The combination of goods that employ resources fully
• The combination of goods that do not employ resources fully

An increase in the labor force would cause the PPF to 

• Shift inward
• Shift outward
• Do nothing
• Turn into a straight line

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently
• The opportunity cost of producing more machines is constant
• Country Y cannot produce at point E
• The most efficient point of production is point D

What does the Production Possibilities Curve (PPC) illustrate?

• The maximum output that an economy can produce without increasing the quantities of inputs

• The relationship between the prices of different goods

• The amount of labor needed to produce a certain amount of goods

• The profit maximization strategies of firms