Question 1

The production possibilities curve shows all possible combinations of

Accepted Answer

The production possibilities curve (PPC) illustrates the trade-offs a society faces when producing two different goods with limited resources. The PPC shows the combinations of the two goods that can be produced efficiently given a fixed amount of resources. Therefore, option B is the correct answer. Option A may be partially true, but the goods produced have to be efficiently produced with limited resources. Option C is incorrect because the PPC does not consider the prices of goods. Option D is incorrect because the PPC shows the different possibilities of production within one country or economy, rather than between two countries.

Question 2

The production possibilities curve represents

Accepted Answer

The production possibilities curve represents all possible combinations of total output that can be produced given the available resources and technology. It shows the trade-offs between producing one good over another, illustrating the concept of opportunity cost. It does not represent society's needs or the total amount of stocks and bonds in the economy. And while human and physical capital may be important factors in production, they are not the only ones represented on the production possibilities curve.

Question 3

A movement along the production possibilities curve would imply that

Accepted Answer

A movement along the production possibilities curve represents a change in the quantity produced of one good in exchange for the quantity produced of another good. This change can only occur if society changes its inputs or resources used to produce the goods. Therefore, a movement along the production possibilities curve would imply that society has chosen a different set of outputs.

Question 4

The production possibilities curve demonstrate which of the following concepts?

Accepted Answer

The production possibilities curve showcases all three concepts of scarcity, choice, and trade-offs. It illustrates that due to limited resources, there are trade-offs to be made in deciding what to produce, and the choice of producing one good means giving up the opportunity to produce another. Thus, the best answer is D as all three concepts are interrelated and are showcased in the production possibilities curve.

Question 5

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

Accepted Answer

The answer of 
-Refer to the above figure. A farmer...

Question 6

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

Accepted Answer

The production possibilities curve illustrates the concept of opportunity cost, which is the cost of forgoing the next best alternative when making a decision. Therefore, choosing one point over another on the curve always involves opportunity costs, making statement D false.

Question 7

A graphical representation which shows the trade-off that occurs when more of one output is obtained at the sacrifice of another is called

Accepted Answer

A production possibilities curve shows the maximum amount of two goods that can be produced given a set amount of resources. It illustrates the trade-off between producing one good versus the other, as an increase in the production of one good requires a decrease in the production of the other. The other options (A, C, D) do not represent this concept.

Question 8

-The above figure is referred to as a(n)

Accepted Answer

The figure is referred to as a production possibilities curve, which illustrates the maximum possible output combinations of two goods or services that can be produced within a given period, given the available resources and technology.

Question 9

Briefly explain why people make choices.

Accepted Answer

The answer of Briefly explain why people make choices....

Question 10

People always face trade-offs because

Accepted Answer

People have finite resources such as time and money, but they have multiple wants and needs that they have to choose from. This creates trade-offs where they have to sacrifice one option to choose another.

Question 11

A straight-line production possibilities curve has

Accepted Answer

A straight-line production possibilities curve indicates that resources are equally efficient in the production of both goods, resulting in a constant opportunity cost between the two goods.

Question 12

-Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?

Accepted Answer

At point a, the slope of the production possibility frontier (PPF) is -0.5 (change in wheat over change in beans). This means that to produce one additional bushel of wheat, the farmer must give up 2 bushels of beans.

Since an acre of land can yield either 400 beans or 800 wheat, the opportunity cost of producing wheat is to give up 2 acres of beans (800/400=2).

If the farmer has 50 acres of land, the maximum number of acres that can be allocated to wheat is:

50 acres x (800 bushels wheat/acre) / (2 bushels beans/bushels wheat) = 20 acres wheat

Therefore, the remaining 30 acres must be allocated to beans.

The answer is 20 - 50 * 0.4 = 20 - 20 = 12.

Question 13

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

Accepted Answer

The answer of 
-Refer to the above figure. A farmer...

Question 14

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C.
-Using the above table but now the bakery bakes 30 pizzas and 240 loaves of bread (alternative

Accepted Answer

Moving from alternative B to alternative D results in an opportunity cost of 2 loaves of bread for each pizza pie. Therefore, the opportunity cost of one pizza pie is 2 loaves of bread. 
The best choice would be alternative D, as it allows for the highest production of both pizzas and loaves of bread (80 pizzas and 200 loaves of bread).

Question 15

The curve that represents all possible combinations of goods that can be produced is called

Accepted Answer

The production possibilities curve (PPC) or frontier shows the maximum output combinations of two products that an economy can produce with its given resources and technology.

Question 16

If the production possibilities curve is a downward sloping straight line, then

Accepted Answer

When the production possibilities curve is a downward sloping straight line, it implies that resources can be shifted from the production of one good to another with no loss in efficiency, indicating perfect adaptability for alternative uses. This contrasts with a bowed-out curve, which would suggest increasing opportunity costs and specialized resources.

Question 17

Which of the following would result in a movement along the production possibilities curve?

Accepted Answer

A movement along the production possibilities curve only occurs due to a change in the production of two goods that a society chooses to produce. The other options listed do not directly affect the production possibilities curve.

Question 18

-In the above figure, the farmer faces a trade-off between beans and wheat equal to

Accepted Answer

The answer of 
-In the above figure, the farmer faces...

Question 19

Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is

Accepted Answer

Since one bushel of corn provides enough seed for one-quarter of an acre of land, consuming 100 bushels of corn today would mean that the opportunity cost next year would be 4 times that amount, which is 400 bushels of corn. Therefore, the best choice is B, which is 25 bushels of corn next year.

Question 20

Which of the following statements indicates the idea of trade-offs?

Accepted Answer

The statement "I chose the road less traveled" implies that the speaker had to give up something (possibly an easier or more conventional path) in order to pursue a different option. This reflects the idea of trade-offs, where making one choice often involves sacrificing something else.

The other statements do not directly reference the concept of trade-offs. B suggests external influence rather than personal choice; C implies a lack of agency altogether; and D speaks to the importance of effort rather than the necessity of weighing options.

Quiz 2: Scarcity and the World of Trade-Offs

The production possibilities curve shows all possible combinations of

The production possibilities curve represents

A movement along the production possibilities curve would imply that

The production possibilities curve demonstrate which of the following concepts?

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

-Which of the following statements about a movement along the production possibilities curve in the above figure is FALSE?

A graphical representation which shows the trade-off that occurs when more of one output is obtained at the sacrifice of another is called

-The above figure is referred to as a(n)

Briefly explain why people make choices.

People always face trade-offs because

A straight-line production possibilities curve has

-Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?

-Refer to the above figure. A farmer has 50 acres of land on which to grow wheat or beans. An acre of land yields 400 bushels of beans or 800 bushels of wheat. Which of the following is a possible combination of beans and wheat that can be grown, assuming the land is farmed efficiently?

The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. -Using the above table but now the bakery bakes 30 pizzas and 240 loaves of bread (alternative

The curve that represents all possible combinations of goods that can be produced is called

If the production possibilities curve is a downward sloping straight line, then

Which of the following would result in a movement along the production possibilities curve?

-In the above figure, the farmer faces a trade-off between beans and wheat equal to

Suppose an acre of land yields 100 bushels of corn and that one bushel of corn provides enough seed for one-quarter of an acre of land. The opportunity cost of consuming another 100 bushels of corn today is

Which of the following statements indicates the idea of trade-offs?