Production Possibilities Frontier (PPF)

What point(s) represents brain drain from a community with poor public safety services?

• a

• b

• gh

• cd

The diagram shows the production possibilities curve for Country Y. Which of the following statements is true?

• If Country Y is producing at point C, it is using all its resources efficiently

• The opportunity cost of producing more machines is constant

• Country Y cannot produce at point E

• The most efficient point of production is point D

Point A inside this Production Possibilities Curve represents:

• Resources are being inefficiently used

• Production is not attainable

• Production is possible if there is an increase in resources

• Production possibilities are going to decrease

What does the Production Possibilities Curve (PPC) illustrate?

• The maximum output that an economy can produce without increasing the quantities of inputs

• The relationship between the prices of different goods

• The amount of labor needed to produce a certain amount of goods

• The profit maximization strategies of firms

Which of the following best describes a point outside the Production Possibilities Curve (PPC)?

• A point that represents efficient production

• A point that is currently unattainable with existing resources

• A point where resources are underutilized

• A point that indicates a decrease in opportunity cost

What happens to the Production Possibilities Frontier (PPF) if there is a technological advancement in the production of one good?

• The PPF remains unchanged

• The PPF shifts outward for the good with the technological advancement

• The PPF shifts outward for both goods

• The PPF shifts inward

Who is affected by the condition of scarcity?

• The rich

• Large economies

• All societies

• Producers (ie: businesses)

Country A produces only cars and food. If it reallocates resources to produce more cars and fewer units of food, the movement along the PPC reflects:

• A decrease in opportunity cost

• An increase in efficiency

• The trade-off between cars and food

• An increase in unemployment

What point is inefficient on the Production Possibilities Frontier?

• Point A

• Point B

• Point C

• Point D

What point(s) is unattainable on the Production Possibilities Frontier?

• Point B

• Point C

• Point D

• Point E

• Point A and B