The law of increasing opportunity cost explains why
a. opportunity cost is constant along the production possibilities frontier
b. the production possibilities frontier is downward sloping
c. the production possibilities frontier is curved
d. efficient points lie along the production possibilities frontier
e. technology remains constant along a production possibilities frontier
QUESTION 2If the production possibilities curve is a downward-sloping straight line, that would indicate
a. that society cannot decide which good it prefers
b. an absence of scarcity
c. constant opportunity cost
d. inefficiency
e. specialization
QUESTION 3The concave shape of a production possibilities frontier showing possible output levels of good A and good B indicates that if the economy produces more and more of good B,
a. larger and larger amounts of good A must be sacrificed
b. smaller and smaller amounts of good A must be sacrificed
c. more of good A will be produced
d. the amount of resources available in the economy must be increased
e. there must be an improvement in technology
QUESTION 4On a production possibilities frontier showing possible output levels of good A and good B, the opportunity cost of producing the first 10 units of A will usually be
a. the same as the opportunity cost of producing the second 10 units of A
b. less than the opportunity cost of producing the second 10 units of A
c. greater than the opportunity cost of making the second 10 units of A
d. 10 units of A
e. 10 units of B
QUESTION 5Because resources are not perfectly adaptable to the production of both good A and good B,
a. the opportunity cost of A increases as production of A increases
b. the opportunity cost of A decreases as production of A increases
c. it is impossible for the economy to produce both A and B
d. the opportunity cost of A is constant
e. the opportunity cost of B is constant
QUESTION 6A production possibilities frontier will be bowed out if
a. there is scarcity
b. resources are used efficiently
c. production of one good involves an opportunity cost
d. resources are not perfectly adaptable to making each good
e. technology is improving
QUESTION 7If the production possibilities frontier is a straight line,
a. its slope will equal -1
b. resources must not be used efficiently
c. resources must be unemployed
d. society must not be using the latest technology
e. resources must be equally adaptable at producing either product
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