The exam

C h a p t e r

2

Topic: Production Possibilities Frontier
Skill: Recognition

Production Possibilities and
Opportunity Cost

4) The production possibilities frontier is
A) upward sloping and reflects unlimited choices.
B) upward sloping and reflects tradeoffs in choices.
C) downward sloping and reflects unlimited choices. D) downward sloping and reflects tradeoffs in choices. Topic: Production Possibilities Frontier
Skill: Recognition

1) The production possibilities frontier
A) refers to the technology used in such goods as computers and military aircraft.
B) once applied to U.S. technology but now refers to Japanese technology.
C) marks the boundary between attainable combinations of goods and services and unattainable combinations. D) is also called the supply curve.

Answer: D
Topic: Production Possibilities Frontier
Skill: Recognition

5) The production possibilities frontier
A) depicts the boundary between those combinations of goods and services that can be produced and those that cannot given resources and the current state of technology.
B) shows how many goods and services are consumed by each person in a country.
C) is a model that assumes there is no scarcity and no opportunity cost.
D) is a graph with price on the vertical axis and income on the horizontal axis.

Answer: C
Topic: Production Possibilities Frontier
Skill: Recognition*

2)
A)

B)
C)
D)

The production possibilities frontier is the boundary between those combinations of goods and services that can be produced and those that can be consumed. those resources that are limited and those that are unlimited. those combinations of goods and services that can be produced and those that cannot. those wants that are limited and those that are unlimited. Answer: A
Topic: Production Possibilities Frontier
Skill: Conceptual

6) The production possibilities frontier illustrates
A) all goods that can be produced by an economy
B) the