Match the PPC shape with its opportunity cost characteristic:
Concave ↔️ Increasing
Straight Line ↔️ Constant
If a country can produce 50 cars or 100 bushels of wheat, what is the opportunity cost of producing one car?
2 bushels
One key assumption of the PPC is that the quantity and quality of resources remain fixed
What does the assumption of full employment mean in the context of the PPC?
All resources are used efficiently
Technological advancements cause the PPC to shift outward.
Steps to graph the PPC:
1️⃣ Set axes and scales
2️⃣ Plot maximum quantities
3️⃣ Draw a concave curve
What shape should the PPC have to reflect increasing opportunity costs?
Concave
A point outside the PPC is unattainable with current resources and technology.
Match the point location on the PPC with its meaning:
On the Curve ↔️ Efficient production
Inside the Curve ↔️ Underutilized resources
What does a shift in the PPC indicate about an economy’s production capacity?
Change in capacity
Natural disasters or prolonged conflicts can cause the PPC to shift inward
Technological advancements always cause the PPC to shift outward.
If a country moves from producing 50 cars and 100 bushels of wheat to 0 cars and 150 bushels of wheat, what is the opportunity cost in terms of cars?
-1 car
The PPC helps in making informed production decisions by illustrating the trade-offs between different goods
The Production Possibilities Curve (PPC) is a graphical representation of the maximum quantity of two goods an economy can produce, given its available resources and technology
The concave shape of the PPC indicates increasing opportunity costs.
One assumption of the PPC is that the quantity and quality of resources remain fixed
Full employment is assumed when constructing the PPC.
Steps to graph a Production Possibilities Curve (PPC)
1️⃣ Set Axes
2️⃣ Plot Points
3️⃣ Draw the Curve
Match the location on the PPC with its meaning:
On the curve ↔️ Efficient production
Inside the curve ↔️ Underutilized resources
Outside the curve ↔️ Unattainable production
What is the opportunity cost if a country moves from producing 50 cars to 0 cars and can now produce 100 bushels of wheat?
2 bushels per car
The Production Possibilities Curve operates under assumptions that simplify economic analysis
The assumption of fixed resources means that the quantity and quality of resources remain constant.
What does the assumption of fixed technology ensure in the PPC model?
Stable output
The assumption of full employment means all resources are fully utilized
Steps to graph the Production Possibilities Curve (PPC)
1️⃣ Set axes and use a reasonable scale
2️⃣ Plot points for maximum production levels
3️⃣ Calculate additional production combinations
4️⃣ Draw a smooth, concave curve
Match the location on the PPC with its meaning:
On the curve ↔️ Efficient production
Inside the curve ↔️ Underutilized resources
Outside the curve ↔️ Unattainable
If an economy can produce 50 cars or 100 bushels of wheat, the opportunity cost is 2 bushels per car.
A point on the PPC indicates maximized opportunity cost.
What does a point inside the PPC indicate about resource utilization?
Inefficient production
A point outside the PPC is considered unattainable with current resources.
A shift in the PPC represents a change in an economy’s overall production capacity.
What could cause the PPC to shift inward, reducing agricultural output?
Severe earthquake
Steps to calculate opportunity cost using the PPC
1️⃣ Identify two points on the curve
2️⃣ Determine the change in production for each good
3️⃣ Calculate the ratio of the changes
What does a PPC shift indicate in an economy?
Change in production capacity
An outward shift in the PPC occurs due to technological advancements or an increase in resources
An inward shift in the PPC reduces the total amount of goods and services produced.
Match the factor with its impact on the PPC:
Technological advancements ↔️ PPC expands
Natural disasters ↔️ PPC contracts
What is an example of a factor that could cause an inward shift in the PPC?
Severe earthquake
Opportunity cost is the potential benefit lost by choosing one alternative over another