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Worksheets2.2 Production Possibilities Frontier
Total questions: 15
Worksheet time: 10mins
Name
Class
Date
1.
The resources in the economy are not all perfectly adaptable to the production of both consumer and capital goods.
a)
True
b)
False
2.
Changes in technology do not usually affect production
a)
True
b)
False
3.
The law of increasing opportunity cost states that each additional increment of one good requires the economy to give up successively larger increments of the other good.
a)
True
b)
False
4.
Producing more capital goods during a particular period is likely to shift the economy's PPF outward the next period.
a)
True
b)
False
5.
Movement down the PPF curve indicates that the opportunity cost of more capital goods is producing more consumer goods
a)
True
b)
False
6.
Efficiency is producing the maximum possible output from available resources
a)
True
b)
False
7.
If many workers decide to retire at an early age, the PPF would shift inward.
a)
True
b)
False
8.
What do points outside of the PPF indicate?
a)
Unattainable combinations of goods
b)
Ideal combinations of goods
c)
Inefficient combinations of goods
9.
Economic growth affects the PPF by...
a)
Shifting inward
b)
Shifting outward
c)
causing no change at all
d)
turning it into a straight line
10.
Which of the following is NOT one of the PPF model's assumptions?
a)
The model focuses on production during a given time period
b)
The resources available are fixed in quantity and quality
c)
The model focuses only on consumer goods
d)
Available technology does not change during a given time period
11.
Suppose that a new machine that speeds up automotive production is introduced into the auto industry. This would cause the PPF to
a)
Shift outward
b)
Shift inward
c)
Do nothing
d)
Not enough information is provided
12.
What do points inside the PPF indicate?
a)
The combination of goods that employ goods efficiently
b)
The combination of goods that employ resources fully
c)
The combination of goods that do not employ resources fully
13.
Which of the following might cause an inward shift of the PPF?
a)
A computer network shuts down due to a virus
b)
More people earn bachelor degrees
c)
A new maching that produces bread faster is invented
d)
OPEC announces a new source of oil
14.
An increase in the labor force would cause the PPF to
a)
Shift inward
b)
Shift outward
c)
Do nothing
d)
Turn into a straight line
15.
The PPF bows outward. Which of the following concepts does this illustrate?
a)
The law of increasing scarcity
b)
The law of economic growth
c)
The law of decreasing efficiency
d)
The law of increasing opportunity cost
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