Production Possibilities Curve- Macro Topic 1.2 (Micro Topic 1.3)

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

• The economy is producing at its maximum potential.

• The economy is experiencing economic growth.

• Resources are being underutilized or used inefficiently.

• The combination of goods is currently unattainable.

What characteristic of opportunity cost is represented by a straight-line Production Possibilities Curve (PPC)?

• Increasing opportunity cost.

• Decreasing opportunity cost.

• Constant opportunity cost.

• Zero opportunity cost.

What does a bowed-out (concave to the origin) Production Possibilities Curve (PPC) illustrate?

• Constant opportunity cost.

• Increasing opportunity cost.

• Decreasing opportunity cost.

• Technological regression.

Which of the following would lead to an outward shift of an economy's Production Possibilities Curve (PPC)?

• A decline in the labor force.

• A decrease in the demand for goods.

• An increase in available resources or technological improvements.

• A decision to produce more consumer goods than capital goods.