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]