Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency quiz #2 Flashcards
Production Possibilities Frontier (PPF) - Introduction and Productive Efficiency quiz #2
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Refer to the graph. What is the opportunity cost of moving from point B to point C?
The decrease in production of one good required to increase production of the other.Refer to the graph. What is the opportunity cost of moving from point B to point C?
The amount of the first good that must be sacrificed to produce more of the second good.Demonstrating opportunity cost is done through production possibilities curves. How?
By showing the trade-offs between two goods when resources are limited.The production possibilities frontier illustrates
The maximum combinations of two goods that can be produced efficiently with available resources.Producers can create their maximum combination of goods, as long as they
Operate on the production possibilities frontier.The production possibilities frontier provides an illustration of the principle that
Scarcity forces choices and trade-offs in production.According to central place theory, the threshold is defined as the
Minimum market size needed to support a good or service.Production possibilities frontiers are usually bowed outward. This is because
Resources are not perfectly adaptable, leading to increasing opportunity costs.Dividing the steps of production between workers is ________.
Division of labor.What are the 3 stages of production?
Increasing returns, diminishing returns, and negative returns.According to the graph shown here, at which of the following points is production unsustainable?
At any point outside the production possibilities curve.Which of the following statements best describes the purpose of the production possibilities curve?
To show the trade-offs and maximum possible output combinations of two goods given limited resources.According to this production possibilities frontier, why does point P demonstrate productive efficiency?
Because it lies on the production possibilities curve, using all resources efficiently.A production possibilities curve (PPC) illustrates the attainable combination of what?
Two goods that can be produced with available resources and technology.The following table shows some data for an economy that produces only two goods: milk and honey. What does this illustrate?
The trade-offs and opportunity costs between producing milk and honey.Combinations outside of the production possibilities frontier are:
Unattainable with current resources and technology.Refer to figure 2-2. At point A in the production possibilities graph shown above, the economy:
Is operating efficiently, using all resources.The production possibilities frontier, or curve, is a graphical representation of the
Maximum output combinations of two goods that can be produced efficiently.Production is efficient if the economy is producing at a point
On the production possibilities frontier.Any point inside a production possibilities curve is
Inefficient, indicating underutilization of resources.For an entire economy, the production possibilities frontier is going to be:
Bowed outward, reflecting increasing opportunity costs.Consider a simple economy that produces two goods. What does the production possibilities frontier show?
The maximum combinations of the two goods that can be produced with available resources.
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