Unit 1 Quiz 5

What is a production possibilities curve (PPC) used to analyze?

• Trade-offs, opportunity cost, growth, and efficiency

• Supply and demand

• Market equilibrium

• Consumer preferences

How can investment in equipment and technology impact the economy?

• It can lead to economic growth

• It can reduce inflation

• It can increase unemployment

• It can decrease productivity

What are examples of investments in human capital?

• Education, job training, and healthcare

• Real estate, stocks, and bonds

• Natural resources, labor, and capital

• Advertising, branding, and marketing

What is the definition of productivity?

• The efficiency of production measured by output per unit of input

• The total amount of goods and services produced in an economy

• The level of consumer satisfaction in a market

• The rate of inflation in an economy

Which of the following is NOT one of the key assumptions of the production possibilities curve?

• Only two goods can be produced

• All resources are being used efficiently

• All resources are fixed

• Resources can be increased or decreased

What is the opportunity cost of moving from point D to point E in the given production possibilities table?

• 1 Calzone

• 2 Calzones

• 3 Calzones

• 4 Calzones

What does a constant opportunity cost imply about the resources used in production?

• Resources are not adaptable for producing either good.

• Resources are easily adaptable for producing either good.

• Resources are only adaptable for producing one good.

• Resources are scarce and limited.

What is the shape of the Production Possibilities Curve (PPC) when there is a constant opportunity cost?

• Curved line

• Straight line

• Zigzag line

• Exponential curve

According to the Law of Increasing Opportunity Cost, what happens as you produce more of any good?

• The opportunity cost decreases.

• The opportunity cost remains the same.

• The opportunity cost increases.

• The opportunity cost becomes zero.

Why do resources lead to a bowed out (convex) Production Possibilities Curve (PPC)?

• Resources are easily adaptable to producing both goods.

• Resources are not easily adaptable to producing both goods.

• Resources are unlimited.

• Resources are always fully utilized.