Economics Quiz

A production possibility curve represents:

• The maximum amount of goods and services an economy can produce

• The different combinations of goods and services an economy can produce

• The equilibrium point of an economy's production

• The opportunity cost of producing one good over another

Points outside the production possibility curve represent:

• Efficient use of resources

• Inefficient use of resources

• Unattainable combinations of goods

• Equilibrium in the economy

Points inside the production possibility curve represent:

• Efficient use of resources

• Inefficient use of resources

• Equilibrium in the economy

• Unattainable combination of goods

If an economy is operating on its production possibility curve, it means that:

• It is utilizing all available resources efficiently

• It is experiencing no opportunity cost

• It is in equilibrium

• It is producing at the minimum possible level

The production possibility curve can shift outward if:

• There is an increase in resources

• There is a decrease in resources

• There is a decrease in demand

• There is a technological advancement

The total cost of producing a good or service is the sum of:

• Fixed costs and variable costs

• Opportunity costs and sunk costs

• Accounting costs and economic costs

• Average costs and marginal costs

The additional cost incurred by producing one more unit of output is known as:

• Average costs

• Total cost

• Marginal cost

• Fixed cost

Which of the following is an example of a fixed cost?

• cost of raw materials

• Cost of production

• cost of renting and leasing a factory building

• cost of electricity used in production

Variable costs are costs that:

• Change with the level of production

• Remain constant regardless of the level of production

• Are incurred only in the long run

• Are incurred only in the short run

The total fixed cost curve is

• vertical.

• horizontal.

• downward sloping.

• upward sloping.