Worksheets1.4 Production possiblity curve diagram
Total questions: 22
Worksheet time: 24mins
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?
They are being over efficient
There is an idle, or unproductive, or use of resources
It is not impossible with the given resources
They are still efficient, just at another point
What does point B represent?
Production at greater than the country's minimum potential
Production is less than the country's minimum potential
Production is greater than the country's maximum potential
Production at the country's maximum potential
Economic growth affects the PPC by...
shifting inward
shifting outward
causing no change at all
turning it into a straight line
Suppose that a new machine that speeds up automotive production is introduced into the auto industry. This would cause the PPC to
shift outward
shift inward
do nothing
not enough information is provided
How does a production possibility curve show that scarcity exists?
It shows that a rise in demand for one of the products increases its price.
It shows that as more resources are used to produce a product, its price rises.
It shows that at any point outside the production possibility curve an economy is wasting
resources.
It shows that there is a limit to the quantity of products that can be produced with existing resources and technology.
An economy produces different types of goods using its limited resources. This can be illustrated by a production possibility curve.
What does point X on the production possibility curve show?
All resources are used for the production of consumer goods.
More resources are allocated to producing capital goods than consumer goods.
Resources are allocated to produce a mixture of consumer and capital goods.
Total resources are not being fully utilised for production of these goods.
The diagram shows two production possibility curves for an economy.
What could have caused the change in the economy’s production possibility curve from XX
to YY?
a decrease in the price level
a large number of industrial disputes
a major earthquake
an increase in unemployment
The diagram shows a production possibility curve for an economy that can provide financial services or agricultural products. The economy is at point X.
Bad weather destroys part of the agricultural produce.
At which point will the economy be in the diagram?
A
B
C
D
The diagram shows a production possibility curve for an economy that can produce agricultural products or financial services. It is currently at point Q.
A crop disease decreases agricultural production but the financial services sector increases output as a result of an increase in demand.
To which point is the economy likely to move?
A
B
C
D
The diagram below shows a production possibility boundary for an economy that produces goods and services.
From the diagram it can be concluded that
point X is productively efficient and point Y is allocatively
efficient.
point Y is productively efficient and point X is allocatively
efficient.
points X and Y are allocatively efficient.
points X and Y are productively efficient.
The following diagram shows the production possibility frontier for an economy that produces bread and honey.
If the economy is initially at point W, then the opportunity cost of moving to point X is
6 units of honey.
8 units of honey.
12 units of bread.
23 units of bread.
