WorksheetsChapter 2: Production Possibilities
Total questions: 34
Worksheet time: 40mins
Name
Class
Date
1.
What is the fundamental problem of every society?
a)
labor costs
b)
scarcity
c)
economic interdependence
d)
market fluctuation
2.
What is the definition of the economic term Opportunity Cost?
a)
the value of the next best alternative that is given up due to the choice you made
b)
The price you pay to purchase something
c)
The benefit you gain by making a decision
d)
The amount of debt you take on by making a decision
3.
What is any resources that are made by humans and used to create other goods and services are called?
a)
Services
b)
Production
c)
Capital
d)
Labor
4.
If a point lies on the curve this means the company/country/individual is being efficient. If a point lies inside the curve, what does that tell?
a)
They are being over efficient
b)
There is an idle use of resources
c)
It is not impossible with the given resources
d)
They are still efficient, just at another point
5.
What does point B represent?
a)
Production at greater than the country's minimum potential
b)
Production is less than the country's minimum potential
c)
Production is greater than the country's maximum potential
d)
Production at the country's maximum potential
6.
What does point Y represent on the PPC?
a)
Efficiency
b)
Unattainable / impossible
c)
Inefficency
d)
Nothing
7.
What is the production possibilities curve?
a)
a graph that shows how efficient an economy can produce a combination of 2 goods
b)
a graph that shows how much money something is
c)
a graph that shows the opportunity a country has to give up in order to lose something else
d)
a visual representation of how land, labor, capital, entrepreneurs are distributed
8.
The opportunity cost of increasing production from 4 to 7 boats is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 trucks
9.
What factors of production are used to make something?
a)
land
b)
labor
c)
capital
d)
entrepreneurs
10.
The production possibilities curve is used to..
a)
represents various combinations of goods and services
b)
produce everything we use
c)
to illustrate all possible combinations of output
11.
True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.
a)
True
b)
False
12.
A country is responsible for producing guns for military defense and school lunches for students who can't afford it ("butter"). The opportunity cost of producing more guns is..
a)
decrease in the # of lunches divided by the increase in the # of guns
b)
increase in the # of guns divided by the decrease in the # of lunches
c)
decrease in the # of guns divided by the increase in the # of lunches
d)
increase in the # of lunches divided by the decrease in the # of guns
13.
If the production of good X increases by 3 units and production of good Y decreases by one unit, then the opportunity cost of one unit of X is ____ unit(s) of Y.
a)
3
b)
1
c)
1/3
d)
4
14.
The table above shows the production possibilities for a country. Based on the table, which of the following production combinations is a possibility?
a)
28 pizzas and 5 pairs of shoes
b)
3 pairs of shoes and 23 pizzas
c)
2 pairs of shoes and 20 pizzas
d)
4 pairs of shoes and 15 pizzas
15.
Based on the table, if the country is currently producing at point B and decides to produce at point C, the opportunity cost for the additional pair of shoes is ____ pizzas.
a)
26
b)
23
c)
3
d)
2
16.
Land, Labor, Capital, and Entrepreneurship
a)
Diversification
b)
Deductions
c)
Portfolio
d)
Factors of Production
17.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
Scarcity
b)
2 boats
c)
2 trucks
d)
3 boats
18.
If a natural disaster strikes, the production possibilities curve can shift
a)
No shift
b)
To the left
c)
To the right
d)
Outward on one axis only
19.
What can cause a production possibilities curve to move to the right?
a)
thousands of people move out of the country
b)
an epidemic kills thousands of young men and women
c)
a new invention lowers the cost of production
d)
the population is growing increasingly old
20.
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
21.
Which point represents "resources are not being used efficiently, or resources are being wasted or idle"?
a)
Point A
b)
Point Y
c)
Point X
d)
All of the above
22.
an economic principle which states that as production shifts from making one good or service to another, more resources are needed to increase production of the second good or service
a)
law of increasing costs
b)
efficiency
c)
production possibilities curve
d)
production possibilities frontier
23.
Changes in technology do not usually affect production
a)
True
b)
False
24.
The resources in the economy are not all perfectly adaptable to the production of both consumer and capital goods.
a)
True
b)
False
25.
Producing more capital goods during a particular period is likely to shift the economy's PPF outward the next period.
a)
True
b)
False
26.
Efficiency is producing the maximum possible output from available resources
a)
True
b)
False
27.
If many workers decide to retire at an early age, the PPF would shift inward.
a)
True
b)
False
28.
What do points outside of the PPF indicate?
a)
Unattainable combinations of goods
b)
Ideal combinations of goods
c)
Inefficient combinations of goods
29.
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
30.
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
31.
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
32.
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
33.
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
34.
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
100 %
