Grade 11 Economics Quiz

What does the Production Possibility Curve (PPC) represent?

• The total income of a country

• The maximum combination of two goods that can be produced with available resources

• The relationship between price and demand

• The financial budget of a business

Which of the following assumptions is NOT associated with the PPC?

• Fixed technology

• Limited resources

• Increasing government intervention

• Full and efficient use of resources

A point inside the PPC curve represents:

• Efficient use of resources

• Unemployment or underutilization of resources

• The maximum possible production

• A combination that is unattainable

What does a point outside the PPC indicate?

• Efficient use of resources

• Economic decline

• Currently unattainable production level

• Unemployment

Which economic concept explains the movement along the PPC curve?

• Scarcity

• Opportunity cost

• Demand and supply

• Market equilibrium

Which of the following best explains the Law of Variable Proportion?

• As more units of a variable input are added to fixed inputs, output initially increases but eventually decreases

• Output always increases in direct proportion to inputs

• The cost of production remains constant irrespective of input use

• Total output decreases as more inputs are added

Which of the following is the correct formula for Average Product (AP)?

• AP = TP × number of inputs

• AP = TP ÷ number of inputs

• AP = TP + marginal product

• AP = TP - marginal product

If the Total Product (TP) of a firm is 600 units and the number of workers employed is 30, what is the Average Product (AP)?

• 10 units

• 15 units

• 20 units

What does Marginal Product (MP) measure?

• The total quantity of output produced

• The additional output from one more unit of input

• The average output per worker

• The total revenue of a business

A firm employs an extra worker, increasing output from 150 to 180 units. What is the Marginal Product (MP) of the additional worker?

• 20 units

• 25 units

• 30 units

• 40 units