1. Introduction to Economics

Production Possibilities — Quiz

Test your understanding of production possibilities with 5 practice questions.

Practice Questions

Question 1

Which of the following best describes the fundamental economic problem that the Production Possibilities Curve (PPC) illustrates?

Question 2

What does the bowed-out (concave) shape of a typical Production Possibilities Curve (PPC) signify?

Question 3

If an economy is producing at a point inside its Production Possibilities Curve (PPC), what can be concluded about its resource utilization?

Question 4

Consider an economy that produces only two goods: consumer goods and capital goods. If this economy decides to produce more capital goods, what is the immediate effect on its ability to produce consumer goods?

Question 5

Which of the following scenarios would lead to a shift in the Production Possibilities Curve (PPC) that is not uniform (i.e., more towards one axis than the other)?