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4A PPC

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  • In a town they produce phones and food. Everyone is equally productive in making phones or making food. What shape does the production possibility curve have in this case?
    linear
  • When a point is located outside the PPC this point is called _______
    Unattainable
  • Why is it that there are two possible shapes on a PPC?
    because the opportunity cost can be constant or increasing.
  • What is the opportunity cost of going from F to I?
    BC
  • A ppc is a curved line because…
    the opportunity cost increases
  • The PPC is a graph that shows the maximum level of _______ that can be reached with a given amount of productive _______ and ________.
    output resources technology
  • A country produces wheat and computers. One year there is a bad harvest, ¿How will this be shown?
    Shift that only affects wheat production.
  • All the points which remain inside the line of the ppc are..
    inefficient
  • What happens if there is innovation in an economy?
    This causes a shift in the PPC because improved production processes helps to boost efficiency.
  • This is a table that represents a PPC. What would be the opportunity cost of going from point E to point C?
    The opportunity cost would be of two units of good 2.
  • At point D, the economy is inefficient. So can we increase both goods and services without any opportunity cost? True or false?
    True
  • What does a PPC show?
    a fixed amount of productive resources of given a quality / efficient use of resources / the state of technology
  • When the PPC is a straight line the opportunity cost is ________
    Constant
  • What would happen if there is a rise in unemployment?
    It would move to another point, inside the same PPC.
  • The points inside the PPC are ……… and the points outside the PPC are …… .
    inefficient / unattainable
  • In this country's production possibility curve, what could allow the economy to move from B to D?
    unemployment, inefficient use of resources
  • Which point in this PPC is unattainable because of scarce resources?
    F
  • What is the opportunity cost of producing 150 units of clothes?
    50 units of food
  • What is the opportunity cost of going from point D to point C?
    The opportunity cost is 3 good B
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