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Econ 1.9

Total questions: 11

Worksheet time: 13mins

Name
Class
Date
1.
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 
2.

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

3.
What does point Y represent on the PPC?
a)
Efficiency
b)
Unattainable / impossible
c)
Inefficency
d)
Nothing
4.

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

a)

6 units of honey.

b)

8 units of honey.

c)

12 units of bread.

d)

23 units of bread.

5.

The table shows the production possibilities for a country. Based on the table, which of the following production combinations is a possibility?

a)

5 pairs of shoes and 28 pizzas

b)

3 pairs of shoes and 23 pizzas

c)

2 pairs of shoes and 20 pizzas

d)

4 pairs of shoes and 15 pizzas

6.

What does a point inside the production possibilities curve indicate?

a)

Unattainable combination

b)

Economic growth

c)

Underutilization of resources

d)

Efficiency

7.

What does a bowed out production possibilities curve indicate?

a)

No opportunity cost

b)

Constant opportunity cost

c)

Increasing opportunity cost

d)

Decreasing opportunity cost

8.

What does a straight line production possibilities curve indicate?

a)

Constant opportunity cost

b)

Increasing opportunity cost

c)

Decreasing opportunity cost

d)

No opportunity cost

9.

What causes the production possibilities curve to shift?

a)

No change in resources

b)

Decrease in resources

c)

Increase in resources

d)

Decrease in technology

10.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
Scarcity
b)
2 boats
c)
2 trucks
d)
3 boats
11.
The opportunity cost of increasing production from 4 to 7 boats is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 trucks