Week 2.doc

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1) Which of the following would not shift an economy's PPC? c) An increase in the money supply. [CORRECT] 2) Which of the following are assumptions underlying the PPC? a) Only two goods are produced. [CORRECT] 3) An economy has a constant cost PPC. What do you know about the slope? a) A straight line. b) Bowed in. c) Bowed out. d) Convex to origin. 4) What statement below implies that a PPC will be an increasing cost curve? b) Most resources are more productive in certain uses than others. [CORRECT] 5) Efficiency along the PPC implies, c) In order to get more of a good, some of another must be given up. [CORRECT] 6) A PPC shows, c) What can be produced with various combinations of resources. [CORRECT] 7) What determines the opportunity cost along a PPC? b) The slope of the PPC. [CORRECT]

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Week 2.doc

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Production Possibilities Curve and Comparative Advantage

1) Which of the following would not shift an economy's PPC?

c) An increase in the money supply.[CORRECT]

2) Which of the following are assumptions underlying the PPC?

a) Only two goods are produced.[CORRECT]

3) An economy has a constant cost PPC. What do you know about the slope?

a) A straight line.b) Bowed in.c) Bowed out.d) Convex to origin.

4) What statement below implies that a PPC will be an increasing cost curve?

b) Most resources are more productive in certain uses than others.[CORRECT]

5) Efficiency along the PPC implies,

c) In order to get more of a good, some of another must be given up.[CORRECT]

6) A PPC shows,

c) What can be produced with various combinations of resources.[CORRECT]

7) What determines the opportunity cost along a PPC?

b) The slope of the PPC.[CORRECT]

1. Which of the following are assumptions underlying the PPC?a. [Only two goods are produced]

2. Efficiency along the PPC implies,

c. [In order to get more of a good, some of another must be given up]

3. Which of the following would not shift an economy's PPC?

c. [An increase in the money supply]

4. What determines the opportunity cost along a PPC?

b. [The slope of the PPC]

5. An economy has a constant cost PPC. What do you know about the slope?

a. [A straight line]

6. What statement below implies that a PPC will be an increasing cost curve?

b. [Most resources are more productive in certain uses than others]

7. A PPC shows,

c. [What can be produced with various combinations of resources]