Exam 2: Production Possibilities Frontier Framework

Exhibit 2-5 -Refer to Exhibit 2-5. Given available resources and technology, this economy can produce 50,000 television sets and 50,000 fax machines only if it chooses to

Economic growth is illustrated by a shift inward (toward the origin) of the PPF.

The economy is currently on its production possibilities frontier (PPF). A politician says that it is possible to get more of everything---more infrastructure, more schools, more national defense, more spending on social programs, and so on. The politician is

Exhibit 2-1 -Refer to Exhibit 2-1. If the economy is at point C, it follows that

Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the vertical axis

A PPF is more likely to be a downward-sloping curve that is bowed outward than a downward-sloping straight line because most resources are

A PPF is bowed outward as a result of

Exhibit 2-7 -Refer to Exhibit 2-7. For which of the following is the statement "In order to get more military goods, we have to forfeit some civilian goods" true?

Exhibit 2-6 -Refer to Exhibit 2-6. Which graph depicts the result of a decrease in the unemployment rate?

If there is always a three-for-one tradeoff between goods X and Y, then the PPF between X and Y is

Assume that two products are being produced: benches and chairs. Create a table that illustrates constant opportunity costs in the production of these two goods. Draw a production possibilities frontier (PPF) based on the data in your table and explain the condition necessary for a PPF to exhibit constant opportunity costs.

Exhibit 2-2 -Refer to Exhibit 2-2. If PPF₂ is the relevant production possibilities frontier, then point __________ is productive efficient.

Explain what productive efficiency means. Describe how productive efficiency is represented by a PPF.

In a PPF graph of goods X and Y, points that lie beyond (to the right of) the PPF represent combinations of the two goods that are currently unattainable.

Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis)?

A decrease in the quantity of resources

Country X has a high unemployment rate. It follows that country X is operating

Which of the following is an illustration of the law of increasing opportunity costs?

Opportunity cost is illustrated by a movement from one point to another on the production possibilities frontier.

Points inside (below) the production possibilities frontier (PPF) are