Y10 Economics - C4 Production Possibility Curve (PPC)

What does the production possibility curve (PPC) represent?

• The maximum combination of goods and services that can be produced

• The total income of an economy

• The unemployment rate in an economy

• The distribution of wealth in an economy

What happens to the production of one good when the production of another good increases along the PPC?

• Production of the second good remains constant

• Production of both goods remains constant

• Production of the first good decreases

• Production of both goods increases

Which point on the PPC indicates that all resources are dedicated to producing olive oil?

• Point A

• Point B

• Point C

• Point D

What does Point E on the PPC represent?

• Attainable production level

• Unattainable production level

• Inefficient use of resources

• Maximum production capacity

What is required for a country to be on its PPC?

• High levels of technology

• Low levels of production

• Efficient use of resources

• Unemployment of factors of production

What causes a shift of the PPC outward?

• Decrease in the quantity of factors of production

• Economic growth

• Increase in unemployment

• Reduction in technology

Which of the following is a cause of movement along the PPC?

• Technological advancements

• Increase in the quantity of resources

• Increase in the quality of resources

• Change in production efficiency

What does a point within the PPC indicate?

• Maximum production capacity

• All resources are fully utilized

• Inefficient use of resources

• Unattainable production level

What is the opportunity cost of increasing olive oil production from O1 to O2?

• W1 to W2 tonnes of wooden furniture

• W2 to W1 tonnes of wooden furniture

• No opportunity cost

• All resources are wasted

Which of the following can lead to an increase in the quality of factors of production?

• Investments in education

• Decrease in technology

• Increase in raw materials

• Reduction in labor force