Production Possibility Curves Quiz

A country's production possibility curve moves from XX to YY What could have caused this movement?

• a rise in the retirement age

• an increase in investment

• an increase in net migration

• a rise in technological progress.

the production possibility curve for an economy producing capital and consumer goods is represented by line PQ. What is the opportunity cost of producing OS of the consumer goods?

• OR of capital goods

• PR of capital goods

• SQ of consumer goods

• SQ of consumer goods + PR of capital goods

The diagram shows two production possibility curves (EF and GH), before and after technological progress has taken place. After technological progress has taken place, what is the opportunity cost in capital goods of producing OX consumer goods?

• MH

• OH

• OM

• YF

The diagram illustrates the production possibility curves for an economy in Year 1. (X1Y1 and Year 2 (X2Y2) What can be concluded from the diagram

• The cost of production was lower in year 2 and year 1

• The full employment level of output was lower in year 2 than in year 1.

• The opportunity cost of production was lower in year 2 than in year 1.

• Unemployment rose between year 1 and year 2.

The diagrams show the change in a country's production possibility curve between year 1 and Year 2. What can be deduced from the diagrams?

• Future growth prospects have been harmed

• The level of unemployment has fallen

• The opportunity cost of consumer goods has risen

• The appropriate growth in production is greater in consumer goods.

The diagram shows the production possibility curve of an economy. Which statement explain the shape of the curve.

• More efficient workers are drawn away from the production of consumer goods.

• Resources can not be switched between producing capital and consumer goods

• The economy is more efficient at producing capital than consumer goods

• The opportunity cost of producing capital goods increases as more capital goods are made.

The curve PP in the diagram is the production possibility curve for a country producing goods X and Y. The production of X is more labour intensive than the production of Y

In the diagram the original production possibility curve is LM. What might cause the curve to shift to NP?

• a higher retirement age

• a relocation of resources

• a depletion of natural resources

• the under employment of resources.

The diagrams shows two production possibility curves, (EF&GH), before and after technological progress has taken place.

A country was at point P on its production possibility curve. Following the threat of invasion it prepared for war. The war then reduced the country's infrastructure.