Economics and Production Possibilities Curve

Topics: Economics, Opportunity cost, Economics terminology Pages: 3 (452 words) Published: April 10, 2013

1. Which fundamental economic question requires society to choose the technological and resource mix used to produce goods?

a. The what to produce question
b. The why to produce question
c. The how to produce question
d. The for whom to produce question

2. A good or service that is forgone by choosing one alternative over another is called a (an): a. Explicit cost
b. Opportunity cost
c. Accounting cost
d. Implicit cost

3. In the context of the production possibilities curve, opportunity cost is measured in:

a. Changing in technology
b. Ringgit paid for the goods
c. The value of the resources used
d. The quantity of other goods given up

4. If an economy is producing at full employment, it means that:

a. The economy is producing at a point to the left of the production possibilities curve b. The economy is producing along its production possibilities curve c. There are idle resources in this economy

d. The production is not efficient

5. Which of the following statement is false?

a. Every economic choice has an opportunity cost
b. Economic growth is illustrated as an inward shift of the production possibilities curve c. Technology is the body of knowledge and skills applied to how goods are produced d. The production possibilities curve shows maximum combination of two goods that an economy can produce

6. Which of the following is true about the production possibilities curve when a technological progress occurs?

a. Shifts outwards to the right
b. Shift inwards to the left
c. Becomes steeper
d. None of the above

7. Which of the following would eliminate scarcity as an economic problem?

a. Moderation of people’s competitive instincts
b. Discovery of sufficiently large new energy reserves
c. Resumption of steady productivity growth
d. None of the above

8. Which...
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