Production Possibilities Curve Review

What does a Production Possibilities Curve (PPC) illustrate?

• The maximum profit a company can achieve.

• The different combinations of two goods that can be produced with full employment of resources.

• The relationship between supply and demand for a single product.

• The total amount of resources available in an economy.

What does a point located inside the Production Possibilities Curve (PPC) signify?

• The economy is producing at its maximum potential.

• The economy is experiencing economic growth.

• Resources are not being used efficiently.

• The production of goods is impossible at this level.

Based on the provided table, what is the opportunity cost of moving from combination B to combination C?

• 1 video

• 4 hats

• 25 hats

• 29 hats

What does a bowed-out (concave) Production Possibilities Curve (PPC) indicate?

• Constant opportunity cost.

• Increasing opportunity cost.

• Decreasing opportunity cost.

• No opportunity cost.