If an economy is operating at a point inside the production possibilities curve,
a. its resources are not being used efficiently.
b. opportunity costs are decreasing as more of one good is traded for the other good.
c. technology has improved.
d. there is full employment of all resources.
The production possibilities curve shows that:
some of one good must be given up to get more of another good in an economy that is operating efficiently.
no output combination is impossible.
an economy that is operating efficiently can have more of one good without giving up some of another good.
scarcity can be eliminated.
A PPC has "good X" on the X axis and "good Y" on the Y axis. On this diagram, the opportunity cost of good X, in terms of good Y, is represented by the:
a. distance to the curve from the horizontal axis.
b. distance to the curve from the vertical axis.
c. distance from the origin to the curve.
d. change in Y for each change in X along the curve.
A production possibilities curve shows the:
a. dollar costs of producing two different goods.
c. various combinations of goods that can be produced.
d. prices of different goods that are produced in an economy.
b. amounts of labor and capital needed to produce one good.
When the production possibilities curve is bowed out, resources are:
a. equally well-suited to production of both goods.
c. not equally suited to the production of both types of goods.
d. increasing as more of one good is produced.
b. not being used efficiently.
When an economy's resources are not fully employed, then it must be true that the:
b. production point is located along the production possibilities curve.
c. production point is located inside and to the left of the production possibilities curve.
a. production point is located outside and to the right of the production possibilities curve.
d. production possibilities curve shifts to the left.
If an economy is producing at full employment, it means that:
a. there are idle resources in this economy.
c. the economy is producing at a point that is to the left of the production possibilities curve.
b. the economy is producing along its production possibilities curve.
d. the economy is producing at a point that is to the right of the production possibilities curve.
Which of the following would be most likely to cause the production possibilities curve for computers and education to shift outward?
a. A choice of more computers and less education.
d. An increase in the quantity of resources.
c. A reduction in the labor force.
b. A choice of more education and less computers.
Along a production possibilities curve showing capital and consumption goods production, which of the following pairs are being held fixed?
Unemployment and capital goods production.
Number of resources and technology.
Composition of the economy's output and number of resources.
Capital and consumption goods production.
Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n):
a. flattening of the curve.
c. outward shift of the curve.
b. movement from one point to another point along the curve.
d. movement from a point on the curve to a point inside the curve.
According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:
c. may be a result of unused natural resources.
d. is not feasible with current resources and technology.
b. may be a result of unemployment.
a. is possible but would be inefficient.
According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:
b. be an efficient way of using the economy's scarce resources.
c. result in the maximum use of the economy's labor force.
a. be unobtainable in this economy.
d. result in a less than maximum rate of growth for this economy.
For the economy shown in Exhibit 2-7 to operate at point C, it must
c. experience resource unemployment.
d. experience an increase in its resources and/or an improvement in its technology.
b. use its given resources more efficiently than it would at point A.
a. be willing to lower the price of grain.
If the economy represented in Exhibit 2-9 is operating at Point W:
b. resources are not fully used.
c. some tractor production must be forgone to produce more food in the current period.
a. no tractor product must be forgone to produce more food in the current period.
d. increased food production would be impossible.
Which of the following moves from one point to another in Exhibit 2-9 would represent an increase in economic efficiency？
X to Y.
W to X.
W to Y.
Z to W.
If an economy is faced with the PPC da ta. As additional units of capital goods are being produced, the number of consumption goods produced must:
b. increase because of the law of increasing costs.
d. decrease because of the finite nature of the resource base.
a. increase because the production possibility table shows only the maximum efficiency points.
c. decrease because of the law of increasing costs.
which of the following could have caused the PPC to shift from the one labeled B to the one labeled A?
c. An advance in technology.
a. A major natural disaster.
b. An increase in resources.
d. A decrease in unemployment.
If an economy with the given PPC is currently at point A in the figure. Which of the following statements is wrong?
This economy could produce more of both capital and consumption goods.
This economy is experiencing full employment.
This economy could produce more capital goods while holding fixed the number of consumption goods produced.
This economy could produce more consumption goods while holding fixed the number of capital goods produced.
In Exhibit 2-13, in terms of efficiency:
b. point A is preferred to point E.
c. point A is preferred to point D.
a. point A is preferred to point B.
d. point B is preferred to point A.
In Exhibit 2-13, point H is:
c. not achievable today because the economy is not at its maximum point of efficiency.
d. not achievable today because of inadequate production capacity.
b. not achievable today because the economy has not achieved full employment.
a. achievable with today's resource base.
In Exhibit 2-14, which of the following explains this economy's movement from point E to point F?
c. The economy has decreased unemployment, but some degree of unemployment still exists
b. Consumption goods production has increased, but capital goods production has decreased.
a. The rate of unemployment in this economy would have increased.
d. The economy has achieved full employment.
in Exhibit 2-16, which of the following points on the PPC are attainable with the resources and technology currently available?
a. A, B, C, E
b. A, B, C, D, W
c. E, U, W
d. A, B, C, D, U
As shown in Exhibit 2-8, the concept of increasing opportunity costs is reflected in the fact that:
b. the labor force in the economy is homogeneous.
c. greater amounts of capital goods must be sacrificed to produce an additional 2 units of consumer goods.
a. the quantity of consumer goods produced can never be zero.
d. a graph of the production data is a downward-sloping straight line.
In Exhibit 2-2, the slope of the production possibilities curve indicates that the opportunity cost of:
b. coffee is increasing.
c. coffee is decreasing.
a. coffee is constant.
d. corn is increasing.
The production possibility curve is bowed outward from the origin because of:
b. the finite nature of the resource base.
c. inefficiency.
a. the law of increasing opportunity costs.
d. unemployment.
As production of a good increases, opportunity costs rise because:
b. people always prefer having more goods.
d. workers are not equally suited to all tasks.
a. there will be more inefficiency.
c. of inflationary pressures.
The law of increasing opportunity costs causes the production possibilities curve to:
b. slope upwards.
c. have a bowed-out shape.
a. be a straight line.
d. shift inward.
What do you call a point outside the PPC (resources are not enough): hint: one word, starts with "u".（you should use all CAPITAL LETTER! )
Which would be least likely to cause the production possibilities curve to shift to the right?
b. improved methods of production
d. a decrease in unemployment
a. an increase in the labor force
c. an increase in the education and training of the labor force