The production possibilities curve shows that:
a. some of one good must be given up to get more of another good in an economy that is operating efficiently.
b. no output combination is impossible.
c. an economy that is operating efficiently can have more of one good without giving up some of another good.
d. scarcity can be eliminated.
QUESTION 2Using a production possibilities curve, a technological advance that increases the amount of output for the same amount of inputs would be illustrated as a(n):
a. flattening of the curve.
b. movement from one point to another point along the curve.
c. outward shift of the curve.
d. movement from a point on the curve to a point inside the curve.
QUESTION 3Which of the following would be least likely to cause the production possibilities curve to shift outward?
a. a decreased desire for leisure by workers in the economy.
b. an invention that requires fewer resources to produce a good.
c. a shift in consumer preferences that causes expansion in the output of one product and a decline in output of other products.
d. an expansion in the man-made productive resources available to the economy as the result of a high rate of investment.
QUESTION 4In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?
a. The production possibilities curves for these countries would have shifted outward.
b. The production possibilities curves for these countries would have shifted inward.
c. The production possibilities curves for these countries would have been unaffected.
d. This would have been illustrated by a movement along the production possibilities curves for these countries, but it would not have shifted them.
QUESTION 5Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?
a. an increase in the labor force
b. an increase in unemployment
c. development of an improved technological method of production
d. a decrease in the stock of physical capital
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