Production Possibilities
Quiz

The curve above shows
- diminishing returns
- increasing returns
- constant returns
- impossible production situation

In the curve above, for every additional unit of Good A produced
- two units of Good B are produced.
- two units of Good B are lost.
- there is an opportunity cost.
- both A and B
- both B and C

The opportunity cost of producing two additional units of Good A
- is one unit of good B
- is two units of good B
- is four units of good B
- cannot be determined from this graph

If production of Good A is increased from 0 units to one unit the opportunity cost would be
- one unit of Good B
- two units of Good B
- six units of Good B
- there would be no opportunity cost

If production of Good A is increased from two units to three units the opportunity cost would be
- two units of Good B
- four units of Good B
- six units of Good B
- twelve units of Good B
- there would be no opportunity cost

The graph above shows
- diminishing returns
- increasing returns
- constant returns
- an impossible production situation

Point Y on the PP curve above represents
- the point of ideal production.
- a point that is unattainable for this situation.
- a point where resources are not being used efficiently.
- a point where there is perfect efficiency in the production of capital goods.
- a desirable point, but not one with maximum profit.

Which of the following would account for a shift in production possibilities from line BB' to line CC' above?
- An increase in the number of workers available in all industries
- A technological advance that aides production in all industries
- The discovery of new resources which are usable in all industries
- all of the above are correct

Which of the following would account for a shift in production possibilities from line BB' to line AA' above?
- An advance in technology aiding consumer products but not capital goods.
- The discovery of a new, easy to obtain resource supply.
- A migration of workers out of the country in question.
- Massive unemployment.

Point Y in the graph above could represent
- full employment
- maximum use of resources
- a situation that is unattainable with current resources and technology
- both A and B