Opportunity Cost and Production Possibilities

The video tutorial explores three types of production possibilities curves (PPC) for rabbits and berries, each representing different opportunity costs. The first curve shows increasing opportunity cost, where catching more rabbits results in giving up more berries. The second curve illustrates decreasing opportunity cost, where the cost in berries decreases as more rabbits are caught. The third curve represents constant opportunity cost, where the trade-off between rabbits and berries remains the same. The video explains these concepts using examples and deductive reasoning.

What is the shape of a Production Possibilities Curve (PPC) that indicates increasing opportunity cost?

• Bowed in to the origin

• A vertical line

• Bowed out from the origin

• A straight line

In the context of increasing opportunity cost, what happens to the opportunity cost as more rabbits are caught?

• It increases

• It fluctuates randomly

• It remains constant

• It decreases

In the increasing opportunity cost scenario, what is the opportunity cost for the fifth rabbit?

• 20 berries

• 100 berries

• 40 berries

• 80 berries

Which scenario best describes a decreasing opportunity cost?

• Each additional rabbit caught requires the same number of berries to be given up

• Each additional rabbit caught requires fewer berries to be given up

• Each additional rabbit caught requires more berries to be given up

• Each additional rabbit caught requires no berries to be given up

What is the opportunity cost for the first rabbit in a decreasing opportunity cost scenario?

• 60 berries

• 40 berries

• 20 berries

• 100 berries

Why does the opportunity cost decrease in a decreasing opportunity cost scenario?

• Because picking berries becomes harder

• Because catching rabbits becomes harder

• Because catching rabbits becomes easier

• Because picking berries becomes easier

What does a bowed in PPC indicate?

• Increasing opportunity cost

• No opportunity cost

• Decreasing opportunity cost

• Constant opportunity cost

In a constant opportunity cost scenario, what is the opportunity cost for each rabbit caught?

• It varies with each rabbit

• It decreases with each rabbit

• It increases with each rabbit

• It remains the same for each rabbit

What is the opportunity cost in terms of berries for each rabbit caught in a constant opportunity cost scenario?

• 20 berries

• 40 berries

• 60 berries

• 80 berries

Which shape of the PPC represents a constant opportunity cost?

• Bowed out from the origin

• Bowed in to the origin

• A straight line

• A vertical line