Production Possibilities Frontier

True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.

• True
• False

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.

• 3
• 1
• 1/3
• 4

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

• 28 pizzas and 5 pairs of shoes

• 3 pairs of shoes and 23 pizzas

• 2 pairs of shoes and 20 pizzas

• 4 pairs of shoes and 15 pizzas

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.   

• 26
• 23
• 3
• 2

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

What is opportunity cost?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money
• by making choices
• by stealing
• by setting a budget

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production 

The opportunity cost of increasing production from 7 to 9 trucks is

• Scarcity
• 2 boats
• 2 trucks
• 3 boats