Question 1

Suppose a country experiences a technological advance that only affects the production of pizza, but not robots. How will this change be reflected on the country's Production Possibility Frontier (PPF)?

Accepted Answer

The PPF will shift outward only along the pizza axis.

Question 2

If a country discovers a new technology that increases the productivity of both robots and pizza bagels, what happens to the PPF?

Accepted Answer

The PPF shifts outward along both axes.

Question 3

After a technological advance in robot production, the maximum number of robots that can be produced increases, but the maximum number of pizza bagels remains unchanged. Which of the following best explains this outcome?

Accepted Answer

The technological advance was specific to robots.

Question 4

If the country of Cukistopia can produce a maximum of 3 million pizza bagels and, after a technological advance, can now produce up to 4 thousand robots (instead of 2 thousand previously) when producing zero pizza bagels, what type of shift has occurred in the PPF?

Accepted Answer

Outward shift along the robots axis only.

Question 5

Which of the following scenarios would cause the entire PPF to shift outward?

Accepted Answer

A general increase in the availability of resources.

Question 6

If Cukistopia demands 3 million pizza bagels, what is the productively efficient increase in robot production after a technological advance that only affects robots?

Accepted Answer

$$1$$ thousand

Question 7

Which of the following best describes a productively efficient point on the PPF?

Accepted Answer

A point where it is impossible to produce more of one good without producing less of another.

Question 8

Suppose a country is currently producing at a point inside its PPF. What does this indicate about its resource utilization?

Accepted Answer

Some resources are unemployed or underutilized.

Question 9

If a country’s PPF shifts outward only along the pizza axis, which of the following is the most likely cause?

Accepted Answer

A technological improvement in pizza production.

Question 10

Which of the following statements is true regarding the effect of a general increase in technology on the PPF?

Accepted Answer

The PPF shifts outward along both axes, increasing the maximum possible output of both goods.

Question 11

If the opportunity cost of producing robots increases, what happens to the slope of the PPF (robots on the vertical axis, pizza bagels on the horizontal axis)?

Accepted Answer

The absolute value of the slope increases.

Question 12

A country’s PPF shifts inward. Which of the following could explain this change?

Accepted Answer

A natural disaster that destroys resources.

Question 13

If a country is operating on its PPF, what does this imply about its production?

Accepted Answer

It is using all its resources efficiently.

Question 14

Suppose the maximum number of robots that can be produced increases from $$2$$ thousand to $$4$$ thousand, while the maximum number of pizza bagels remains at $$3$$ million. What is the new opportunity cost of producing one robot if previously it was $$1.5$$ million pizza bagels per robot?

Accepted Answer

$$0.75$$ million pizza bagels per robot

Production Possibility Frontier (PPF): Outward Shifts and Technological Change

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