2. Introductory Economic Models

Suppose that Ned can produce either potato chips or computer chips. If Ned is operating on his production possibilities frontier (PPF), what does this indicate about his production?

In the context of a fixed plant size, what typically happens to the average product of labor as additional units of labor are added?

Which of the following scenarios is illustrated by a point located on the production possibilities frontier (PPF)?

Combinations outside of the production possibilities frontier (PPF) are:

According to the production possibilities frontier (PPF) graph, at which of the following points is production unsustainable?

Refer to the diagram. If actual production and consumption occur at point q1, which of the following statements is correct?

The construction of a production possibilities curve assumes which of the following?

Which concept does the Production Possibilities Frontier (PPF) illustrate when showing the trade-off between producing two goods?

The production possibilities frontiers depicted in the diagram to the right illustrate which of the following concepts?

Suppose point A on a Production Possibilities Frontier (PPF) represents productive efficiency in capital goods. Which of the following investments would most likely correspond to an investment at point A?

A point that lies inside the production possibilities frontier (PPF) reflects which of the following?

Improvements in the methods of production allow for the creation of:

Suppose an economy can produce either 100 units of good X and 200 units of good Y, or 150 units of good X and 100 units of good Y, or 200 units of good X and 0 units of good Y. If the production possibilities frontier (PPF) represents the maximum possible output combinations, which of the following combinations would be unattainable?

Refer to the graph of the Production Possibilities Frontier (PPF). If moving from point B to point C results in producing 10 more units of good X and 5 fewer units of good Y, what is the opportunity cost of this move?

Refer to the graph of the Production Possibilities Frontier (PPF). If an economy moves from point B to point C, what does the opportunity cost represent?