Unit 1: Diagram Review

Which points represent productive efficiency?

• Points A, B, and C

• Points D, E, and F

• Points G, H, and I

• None

Which points represent inefficient use of resources?

• Points A, B, and C

• Points D, E, and F

• Points G, H, and I

• None

Which points are impossible?

• Points A, B, and C

• Points D, E, and F

• Points G, H, and I

• None

What does an outward shift of the PPC represent?

• Economic growth

• Economic contraction

• Idle resources

• Inflexible wages

What does an inward shift of the PPC represent?

• Economic growth

• Economic contraction

• Idle resources

• Inflexible wages

What does a concave PPC represent?

• Increasing opportunity costs (resources are not perfectly adaptable)

• Constant opportunity costs (resources are perfectly adaptable)

• Increasing opportunity costs (resources are perfectly adaptable)

• Constant opportunity costs (resources are not perfectly adaptable)

What does a concave PPC represent?

• Increasing opportunity costs (resources are not perfectly adaptable)

• Constant opportunity costs (resources are perfectly adaptable)

• Increasing opportunity costs (resources are perfectly adaptable)

• Constant opportunity costs (resources are not perfectly adaptable)

Which country has the absolute advantage in the production of coffee?

• Brazil

• Peru

Which country has the absolute advantage in the production of soybeans?

• Brazil

• Peru

Which country has the comparative advantage in the production of coffee?

• Brazil

• Peru