C1S3 - Analyzing Production Possibilities

Simplified representations of complex economic activities are called economic

• curves

• models

• prototypes

• templates

PPC is an acronym for

• preliminary production chart

• preliminary production curve

• production possibilities chart

• production possibilities curve

When creating a PPC, economists assume that

• resources are not fixed

• resources are inefficiently used

• only three things can be produced

• technology is fixed

The condition in which economic resources are not being used to their full potential is called

• efficiency

• scarcity

• utilization

• underutilization

Any point outside the curve of a PPC represents a goal that is

• impossible to meet because resources are fixed

• impossible to meet because resources are not fixed

• possible to meet because resources are fixed

• possible to meet because resources are not fixed

What is the law of increasing opportunity costs?

• As production switches from one product to another, production gets easier.

• As production switches from one product to another, production gets costs go down, leading to cheaper prices for consumers.

• As production switches from one product to another, workers lose jobs.

• As production switches from one product to another, increasingly more resource are needed to increase the production of the second product, which causes opportunity costs to rise.