AnswersLA-Financial Math AProduction Possibilities Curves

Production Possibilities Curves Answers

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1
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Production possibilities frontiers curve when they are charted on a graph because they show

A
the underutilization of resources.
B
the maximum output of goods and services.
C
the increasing costs resulting in increasingly less output.
D
the technological level of the economy’s productivity.
2
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Which of the following is NOT shown on a production possibilities curve?

A
all of the goods and services an economy has the ability to produce
B
the efficiency of an economy
C
whether an economy has grown or shrunk
D
the opportunity cost of a decision to produce more of one good or service
3

As displayed on a production possibilities curve, what will an increase in technology allow a society to do?

A
Produce more, as long as the resources are also available.
B
Produce less, because more resources are spent on developing technology.
C
It will not affect society’s production.
D
The society will spend more on the same level of production.
4

Please select the word from the list that best fits the definition

A
efficiency
B
goods
C
trade-off
D
production possibilities graph
E
scarcity
F
services
G
shortage
H
opportunity cost
I
underutilization
J
labor
K
factors of production
5

Please select the word from the list that best fits the definition

A
efficiency
B
goods
C
trade-off
D
production possibilities graph
E
scarcity
F
services
G
shortage
H
opportunity cost
I
underutilization
J
labor
K
factors of production
6

Please select the word from the list that best fits the definition

A
factors of production
B
production possibilities frontier
C
production possibilities graph
D
trade-offs
E
shortage
F
scarcity
G
growth
H
opportunity cost
I
underutilization
J
efficiency
K
services
7

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Question illustration
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A
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B
C
C
D
D
8

A nation’s automakers install new robotic machinery to build cars. Now, cars take only a day to make, and the factories can produce many more cars than before. This is an example of growth caused by

A
land and natural resources.
B
human capital.
C
technology.
D
production possibility curves.
9

What does a production possibilities frontier show?

A
scarce and less scarce resources
B
global trade-offs and costs of doing business
C
an economy that is producing but not at the maximum
D
the maximum amount that an economy can produce
10

The law of increasing costs means that when an economy increases the production of one item

A
the opportunity cost goes up.
B
the actual cost of making the item goes down.
C
the actual cost goes up but the opportunity cost goes down.
D
the production costs will increase also.

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