Post on 13-Sep-2014
description
PRODUCTION POSSIBILITIES QUIZ
Point A represents the amounts of cars and bicycles that will be sold.
bicycles
cars
A
PRODUCTION POSSIBILITIES QUIZ
#1 True or False?
As you move from point F to point G the price of bicycles increases.
bicycles
cars
F
G
PRODUCTION POSSIBILITIES QUIZ
#2 True or False?
Movement along the curve from point C to point A shows us the opportunity cost of producing more bicycles.
bicycles
cars
A
C
PRODUCTION POSSIBILITIES QUIZ
#3 True or False?
If we have high unemployment then the curve shifts in.
bicycles
cars
?
PRODUCTION POSSIBILITIES QUIZ
#4 True or False?
If an improved process for manufacturing cars is introduced, then the entire curve will shift out.
bicycles
cars
?
PRODUCTION POSSIBILITIES QUIZ
#5 True or False?
Point A represents the amounts of cars and bicycles that will be sold. ANSWER: False. It represents how many cars and bicycles are produced!
bicycles
cars
A
PRODUCTION POSSIBILITIES QUIZ ANSWERS
#1 True or False?
As you move from point F to point G the price of bicycles increases. ANSWER: False. The number of bicycles produced increases.
bicycles
cars
F
G
#2 True or False?
PRODUCTION POSSIBILITIES QUIZ ANSWERS
Movement along the curve from point C to point A shows us the opportunity cost of producing more bicycles. ANSWER: False. It represents the opportunity cost of producing more cars.
bicycles
cars
A
C
#3 True or False?
PRODUCTION POSSIBILITIES QUIZ ANSWERS
If we have high unemployment then the curve shifts in. ANSWER: False. Unemployment means that not everyone is working so production is inside the PPC. The PPC stays put since it represents the maximum output if all resources are being used to the fullest.
bicycles
cars
?
#4 True or False?
PRODUCTION POSSIBILITIES QUIZ ANSWERS
If an improved process for manufacturing cars is introduced, then the entire curve will shift out. ANSWER: False. The curve only moves out along the car-axis. It is not possible to make more bicycles than before.
bicycles
cars
?
#5 True or False?
PRODUCTION POSSIBILITIES QUIZ ANSWERS
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