#1 True/False: Reducing unemployment will shift an economy’s production possibilities curve outward.

Solution Show
[break]
#2 How would you graphically determine whether a country is operating at full employment or not?
Solution Show
[break]
#3 What does a straight line production possibilities curve imply?
Solution Show
[break]
#4 True/False: All else equal, if an economy is operating on the PPC, the only way for it to produce more of one good is to give up some of the other.
Solution Show
[break]
#5 A production possibilities curve shows the maximum amounts of two goods that can be produced under what assumptions?
Solution Show
[break]
#6 Why is the production possibilities curve typically concave to the origin (bowed out)? What does this imply about the opportunity cost?
Solution Show
[break]
Refer to this table for questions #7 to #14:
PPM PP - Table 1
#7 Refer to the above table. If the economy is producing at C, what is the opportunity cost of one more unit of X?
Solution Show
[break]
#8 Refer to the above table. If the economy is producing at point C, what is the opportunity cost of one more Y?
Solution Show
[break]
#9 Refer to the table above. If this economy has a total output of 0X and 20Y, what can we infer from this?
Solution Show
[break]
#10 Refer to the table above. What must happen in order for this economy to produce 8X and 18Y?
Solution Show
[break]
#11 Refer to the table above. Without changing the technology available, how might this economy achieve a total output beyond its PPC?
Solution Show
[break]
#12 Refer to the table above. Without graphing, how can we tell if the opportunity cost in this economy is increasing, decreasing, or constant?
Solution Show
[break]
#13 Refer to the table above. If you were to graph this PPC, what would the curve look like?
Solution Show
[break]
#14 Refer to the table above. At which production alternative will this economy produce at?
Solution Show
[break]
#15 Will an economy achieve faster economic growth by producing more consumer goods or more capital goods?
Solution Show
[break]
#16 All else equal, a sudden population decline will likely do what to a production possibilities curve?
Solution Show
[break]
#17 A new piece of machinery is invented that allows us to produce the same number of goods with fewer resources. What is this considered a change in and what will it do to the PPC?
Solution Show
[break]
#18 What does a convex PPC imply? Would this be likely in the real world?
Solution Show
[break]

Disclaimer

All works here are my own and are considered works in progress and may be subject to change at any time. The opinions expressed here are mine only unless otherwise noted. I am not being paid by a third party to endorse a product of any sort. These writings are written for my own references. I do not claim to be a professional of any kind so follow any information you find here at your own risk. The facts that I post on here are things that I believe to be true, but may not necessarily be so. This is the internet; do your own fact checking and take everything with a grain of salt.

Comments are closed.