Production Possibilities Frontier (PPF)

The opportunity cost of increasing production from 4 to 7 boats is

• 1 truck

• 2 trucks

• 3 trucks

• 4 trucks

Based on the production possibilities table, which production combination is possible?

• 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

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 production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods

• a chart that displays the relationship between supply and demand

• a diagram illustrating the effects of inflation on prices

• a model that predicts future economic growth

What is opportunity cost?

• the cost of an opportunity lost

• the benefit gained from a decision

• the opportunity one has to give up in order to gain something else

• the total cost of all available options

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.

• 1/3

• 1/2

• 1

• 3

The production possibilities curve is an illustration of what?

• Opportunity costs and trade-offs

• Supply and demand

• Market equilibrium

• Consumer surplus

A country is responsible for producing guns for military defense and school lunches for students who can't afford it ("butter"). The opportunity cost of producing more guns is..

• decrease in the # of lunches divided by the increase in the # of guns

• increase in the # of lunches divided by the decrease in the # of guns

• total number of guns produced divided by total number of lunches

• the difference in the cost of guns and lunches

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

• True

• False

• Sometimes

• Rarely

Land, Labor, Capital, and Entrepreneurship

• Factors of Production

• Economic Resources

• Production Inputs

• Resource Allocation