The production possibilities curve depicts the various combinations of two goods that can be:
a. interchanged among two countries.
b. produced with a given technology.
c. consumed with a given quantity of resources.
d. produced with increments in resources and changes in technology.
e. consumed as the resources increase.
QUESTION 2The production possibilities curve illustrates all of the following concepts except:
a. the law of increasing costs.
b. unlimited wants.
c. scarcity.
d. opportunity cost.
e. availability of resources.
QUESTION 3The production possibilities curve shows different combinations of goods that:
a. can be consumed by households.
b. can be consumed by firms.
c. can be produced with the available technology.
d. are produced and consumed by firms.
e. are bought and sold in the market.
QUESTION 4When an economy's resources are not fully employed, then it must be true that the:
a. production point is located outside and to the right of the production possibilities curve.
b. production point is located along the production possibilities curve.
c. production point is located inside and to the left of the production possibilities curve.
d. production possibilities curve shifts to the right.
e. production possibilities curve shifts to the left.
QUESTION 5When the production possibilities curve is bowed out, resources are:
a. equally well-suited to production of both goods.
b. not being used efficiently.
c. not equally suited to the production of both types of goods.
d. increasing as more of one good is produced.
e. of an inferior quality.
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